BBC pension deficit increases to £2.6bn
The BBC's pension scheme deficit has increased from £1.4bn to £2.6bn over the last year, the latest valuation of the BBC Pension Scheme reveals.
This is despite changes in members' pensions and £60m of additional contributions from the BBC to the scheme.
In the report, the chair of the trustees Bill Matthews puts increase in the deficit down to the Eurozone crisis, lower prospects for economic growth and very low interest rates.
The BBC's chief financial officer and pension trustee Zarin Patel goes on to explain in the About the BBC blog that falling bond yields have pushed up the value of liabilities.
It's a set back for the Pension Scheme's recovery plan which aims to eliminate the funding shortfall by April 2021. Part of that plan includes additional payments to the fund from the BBC to a total of £905m over 11 years. That's on top of the BBC's regular contribution of £100m a year to the scheme.
However, this is an interim valuation and the BBC aren't obliged to react. Zarin Patel says in her blog that 'if necessary' the BBC will agree a new schedule of contributions to address any deficit after the full valuation in 2013.
Pension scheme members are receiving the the news in letters sent to their home addresses over the weekend.Deficit debate
Unions have been keeping an eye on the pension deficit as attempts to change the pension have been a contentious issue. In 2010 NUJ members conducted a 48 hour strike in protest to proposed pension changes which took Radio 4's Today programme and BBC Two's Newsnight off air.
The size of the pension deficit then featured in negotiations with the unions. The BBC agreed at the end of these long talks in 2010 that it would reopen discussions with the joint unions if the deficit was £1.5bn or less before any changes came in. These talks did not happen as they deficit came out as £1.6bn.
The pension scheme was closed to new joiners in November 2010. In April 2011 a 1% limit to on increases in pensionable salary was introduced for people in the three versions of the Scheme called the Old, New and CAB 2006 schemes. Existing members were given the option to switch to new schemes called CAB 2011 and LifePlan. Patel adds that had those changes not been put through the deficit could possibly be around £750m higher.
Reacting to the most recent valuation, Helen Ryan from broadcasting union Bectu said:
'We are disappointed that the deficit has increased, however we welcome the fact that the BBC are not proposing changes to the scheme'.