Pension cover-up in BBC report

BECTU has accused the BBC of burying good news about its pension scheme by dropping key data from its Annual Report.

Vital finance figures showing a massive surplus in the BBC's pension fund have been omitted from the report, published today, July 7.

Normally the BBC reports on each year's pension scheme "interim valuation" - a snapshot measurement of a pension fund's health in between the three-yearly full valuations required by law.

This year the interim valuation figures have been dropped - a change that the union believes was made to avoid the BBC having to reveal an embarrassingly-large fund surplus at a time the Corporation is planning cuts in pension benefits for staff.

Union officials estimate that the BBC's pension scheme has a surplus approaching half a billion pounds, based on the £130 million surplus figure that was included in the Annual Report in accordance with accounting rule FRS 17.

This measurement, although notoriously volatile, has always shown a lower valuation of the BBC scheme than the statutory calculations carried out each year by pension actuaries. The fact that its FRS 17 figure has gone into the black, after three years of deficit, means that the BBC pension scheme is healthier than almost any other large pension fund in the UK.

BECTU has criticised the BBC for concealing the good news about its pension scheme, saying that staff are being denied important information which fatally undermines the Corporation's case for cuts in pensions.

In April the BBC announced that its normal retirement age would rise from 60 to 65 in 2016, and from this September new staff joining the Corporation would have access only to a limited-benefit "career average" pension, rather than the more beneficial final-salary scheme that current staff belong to.

Additionally, staff are being asked to increase their payments into the scheme to 7.5% of salaries in 2007, followed by another possible increase to 9% in 2008.

According to the BBC, which met BECTU and other BBC unions today, July 7, the planned pension changes will go ahead despite more than 75% of staff opposing them in a management-organised consultation that attracted more than 1,000 responses.

Least popular with staff was a 9% contribution rate, opposed by nearly 80%, followed by the increase in retirement age which was rejected by 77%.

At today's meeting union representatives accused management of riding rough-shod over staff opinions by ignoring the outcome of the consultation.

Since the pension changes were announced, the unions have repeatedly demanded that the BBC should acknowledge that it runs one of the best-funded pension schemes in the UK, and accept that the proposed changes are unnecessary.

A formal demand for the changes to be deferred until April 2007 at the earliest, when another valuation is due, has been turned down by the BBC, and unions are due to meet on Monday July 10 to discuss possible industrial action on pensions and pay.

Anger at the BBC's sleight-of-hand on pensions figures is likely to be inflamed by the Annual Report's revelation that the entire executive board of top managers received a 10% pay increase in 2005, nearly three times more than staff whose rise was 3.5%.

Despite an official BBC explanation that the inflation-busting management rise was meant to buy out some executive rights to annual bonuses, the top management again appear to have awarded themselves generous bonus payments.

Top winner was John Smith, head of BBC Worldwide and BBC Chief Operating officer, who pocketed an £87,000 bonus, followed by Deputy Director General Mark Byford, who took home a £40,000 bonus.

Director-General Mark Thompson waived his bonus, but is not expected to suffer financial hardship thanks to his £609,000 salary, up from £548,000 the previous year.

BECTU's assistant general-secretary Gerry Morrissey said: "It is extremely arrogant for the senior management team to award themselves huge pay increases in the same year that they made 3,000 staff redundant and closed the final salary scheme to new staff".

Looking ahead to the union meetings on July 10 when representatives will discuss their response to the BBC's pension changes, and a below-inflation pay offer for 2006, Luke Crawley, BECTU's BBC officer said: "It seems that senior management have one set of rules for themselves, and another for the 26,000 people they employ.

"I am confident that today's announcement will reinforce the opinion of union members that industrial action is needed to protect their pay and pension provisions".