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Annual Review 2002/2003
Notes to the financial statements « back
3 Employees and remuneration
3d Pensions
BBC Pension Scheme
Many BBC World Service employees are members of the BBC Pension Scheme which provides salary related pension benefits on a defined benefit basis from assets held in separate, trustee-administered funds.
BBC World Service, following the provisions within FRS 17: Retirement Benefits, accounts for the scheme as if it were a defined contribution scheme. This is because it is not possible to identify the share of the underlying assets and liabilities of the scheme relating to BBC World Service on a consistent and reliable basis.
The pension cost charged for this scheme represents contributions payable by BBC World Service, amounting to £1.6 million in the year (2002 £1.3 million).
The scheme is subject to independent valuation by a professionally qualified actuary at least every three years, on the basis of which the actuary certifies the rate of employer’s contributions. These, together with the specified contributions payable by employees and proceeds from the scheme’s assets, are expected to be sufficient to fund the benefits payable under the scheme. The most recent full actuarial valuation of the scheme was prepared as at 1 April 2002 by Watson Wyatt, consulting actuaries, using the projected unit method.
At 1 April 2002 the actuarial valuation showed a surplus of £441 million and the actuarial value of the assets was sufficient to cover 109% of the benefits due to members after allowing for expected future increases in earnings.
Employer contributions have remained steady for a number of years. However, in order to maintain the financial health of the scheme, it has been agreed with the trustees that employer contributions will rise by 0.5% a year for three years from the current 4.5% of pensionable pay, with the first 0.5% increase taking effect from 1 April 2003. In addition, employee contributions will rise 0.5% per year from 4.5% to 6.0% over the three-year period commencing 1 April 2004.
Additional disclosure about the scheme and its financial position under FRS 17 is provided in the BBC Annual Report and Accounts that can be obtained from The Secretary, BBC, Broadcasting House, London W1A 1AA.
Other Schemes
BBC World Service made payments of £0.7 million (2002 £0.8 million) into the Group Personal Pension Scheme and other schemes.
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