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
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
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 employers contributions. These, together
with the specified contributions payable by employees and proceeds from the schemes 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.
BBC World Service made payments of £0.7 million (2002 £0.8 million) into the Group Personal Pension
Scheme and other schemes.