The BBC is still struggling to come to an agreement with its staff about how to plug the gap in its final salary pension scheme.
The deficit currently sits at an estimated £2 billion. However, the liabilities of final salary pension schemes are typically difficult to value as they change according to life expectancy predictions and stock market performances. The liabilities may also change according to variations in how payments are expected to be indexed.
But no matter how you do the sums, the BBC pension scheme is in trouble, and needs to sort out its defined benefit scheme to make it sustainable. There has even been talk of selling the BBC’s flagship building television centre and putting the proceeds into the pension scheme.
Senior managers are reported to have agreed to give up around £1 million worth of pay in lieu of pension contributions, to be seen as doing their bit towards reducing the deficit. However, this has had little effect on regular employees on more modest packages, for whom the idea of having £1 million of benefits to give up seems a world away.
So far the other proposals on the table have proved to be unpalatable to the staff. They include reduced payments, increased contributions and potentially retiring later. One proposal which has infuriated BBC staff is that increases in their pensionable salaries will be capped at 1% per year. This suggestion would erode the value of the pensions that members have already accrued, thanks to inflation.
But who on earth will vote for retiring later for less? The National Union of Journalists has indicated that unless the current rights that have been built up are protected, they will strike on the issue.
The BBC is not the only big organisation with a large deficit that is struggling with negotiations with staff. British Airways has famously had many heated discussions in recent weeks, leading to strikes that have been called off at a moment’s notice.
