Career Average Benefits
The CAB 2006 section is closed to new members. It is a pension arrangement under which benefits build up year on year and reflect your pensionable earnings during your membership of the Scheme.
Do I have to be a CAB member?
No, you do not have to be a CAB member.
You can end your membership without leaving service, subject to at least two months' notice. To do so you will need to complete an opt-out form, which you can get by contacting the pension service line.
Once you have opted out, you cease to build up benefits and become a life assurance member. This means your life cover for death in service reduces from four to two times your pensionable salary. In addition, if after opting out you have put your CAB 2006 pension from the Scheme into payment, your life assurance benefits will be further reduced by the amount of any cash lump sum you took on retirement. You should read the note 'BBC Pension Scheme death in service provisions' for more information. The note is available from the pension service line.
Pension provision is an important element of your reward package. By opting out you will be giving up a valuable benefit. Therefore before making such a decision, you should consider taking independent financial advice.
Rejoining the scheme
Having opted out, you will have no automatic right to rejoin the scheme. Instead, you will be able to join LifePlan - the BBC's defined contribution plan.
How much does it cost?
Benefits are paid for partly by you and partly by the BBC.
Your share of the cost
Currently, you pay 4% of your pensionable salary. This can be varied jointly by the BBC and the Trustees. It cannot go above 6% without a change to the scheme rules.
As a CAB 2006 member your contributions will normally be met through salary sacrifice. This is called 'Smart Pensions'. Your basic salary is reduced, currently by 4%, and the BBC pays an equivalent amount as an employer contribution to the Scheme on your behalf. Because your basic salary is lower, you will usually pay lower National Insurance contributions. The income tax you pay is unaffected by Smart Pensions. This is because PAYE income tax is always applied to earnings after any pension contributions have been deducted. For some members (e.g. those on low pay or receiving State benefits) Smart Pensions may be disadvantageous. If you are one of them, you will be excluded automatically and alternative arrangements will be made to collect your contributions. If you want to know more about Smart Pensions, there is a leaflet you can get by contacting the pension service line.
If you want to know more about Smart Pensions, there is a leaflet you can download here
In addition to whatever contributions they pay under Smart Pensions, the BBC and other participating employers pay contributions to cover the balance of the cost of providing your Scheme benefits, as agreed with the Trustees. In other words, your employer carries the risks associated with investments and with people living longer, which will affect the cost of providing the benefits you have built up.
You can pay additional contributions through LifePlan to boost your pension benefits. You can find out more about LifePlan here.
Alternatively, you can pay additional contributions to your own personal pension.
The CAB 2006 section has been closed to new joiners since 1 December 2010"