New BBC offer goes to vote

Unions are running a consultative ballot on a revised pay and pensions offer from the BBC.

Representatives from BECTU, NUJ, and Amicus decided to run the ballot at a meeting in London on July 19, where they heard details of a package that had been hammered out in talks with the BBC Director-General a few days before.

The proposals include an improvement in the Corporation's 2006 pay offer from 2.6% to 2.8%, and compromises on controversial plans for changes in pension provision at the BBC.

A plan to raise retirement age from 60 to 65 is postponed until a further valuation of the BBC's pension fund is carried out in 2007, and an increase in staff pension contributions to 7.5% of salary is deferred for six months to September 2007.

Management have also played down the possibility of a further increase in staff contributions in 2008 to 9%, saying that this would be totally dependent on the 2007 pension valuation.

Union demands that the existing pension scheme should be kept open for new staff were turned down, but the BBC has offered improvements in the new career average pension scheme (CAS) it plans to create.

Staff who join the CAS will earn a credit towards their pension each year of 1.67% of salary, an improvement on the original 1.5% proposed, and the credits will be linked to inflation unless "exceptional economic circumstances" apply.

Improvements have also been offered on pensions paid to members of the CAS who retire early on grounds of sickness or die in service.

Further concessions on the new pension scheme will allow staff currently in the final salary pension scheme who take career breaks in future to re-join the current scheme, rather than being forced into the new career average pension arrangements.According to the BBC roughly 800 current staff on fixed-term contracts would benefit.

The BBC also conceded that many staff currently employed on fixed-term contracts should be allowed to join the existing pension scheme, even after the career average scheme is introduced, provided they have completed two years of service on their current contracts.

Compromise proposals on the career average pension scheme were tabled separately by the BBC from the other pension concessions as an acknowledgement that the unions are still opposed in principle to its introduction, but are prepared to accept improvements to its benefits.

A target date of September 1 for the creation of the CAS pension arrangements has been moved to November 1 2006.

DG Mark Thompson tabled the revised offer on pay and pensions in the face of a threat that unions would begin a strike ballot across the BBC tomorrow, July 20. One condition attached to the package was that the unions would make no recommendation to members on which way to vote when running the consultative ballot.

Thompson's olive branch was offered after he and other BBC executives came under fire from staff, politicians, and journalists, over inflation-busting pay rises and bonuses for the Corporation's top bosses which were revealed in its annual report, published on July 7.

At the time, the BBC's pay offer stood at 2.6%, the RPI figure for April. However, the unions decided to defer consideration of the offer until progress had been made in talks over the pension changes, and by early July inflation had risen to 3.0%, and subsequently rose to 3.3% for the year to June.

In a letter outlining the new package on pay and pensions, the BBC explained its below-inflation pay offer by citing its need to "balance the books" before the expiry of its current Royal Charter at the end of the year.

As well as the 2.8% increase in basic pay and associated payments, the offer raises the premium payments made to staff who work overnight shifts.

The Annual Report also showed that the BBC's pension fund was not in deficit, and even on the tough accountancy test FRS17, had a surplus of £170 million, and in the offer letter the BBC acknowledged that "not everyone [among union members] believes the proposed pension changes are necessary".

Management have justified the pension changes on the grounds of "cost and risk control" following an actuarial valuation which concluded that the BBC's pension fund requires annual contributions equal to 24.8% of the salary bill, of which staff currently pay 5.5% (due to rise to 6.0% in September 2006).

The BBC is committed to making its full 17.3% contribution to the fund from April 2007, but expects that the pension changes, even after the compromises in the new pay and pensions package are taken into account, will lead to a gradual but sustained reduction in the annual payments needed to keep the pension scheme going.

When unions first threatened industrial action over pay and pensions, it was expected that members would also be balloted for action over the ongoing "value for money" job cuts, originally proposed by DG Mark Thompson in April 2005.

However, since then the number of staff facing compulsory, rather than voluntary, redundancy has been reduced to single figures, and members are instead being asked to approve the union view that the dispute over the first year of job cuts is now over.

Voting papers are due to be sent out to BECTU members by July 24, and voting will end on August 11. BECTU will be running three ballots - directly-employed BBC staff will be voting on the package as a whole, staff in BBC Worldwide will vote on the pensions proposals, and their own 2.8% pay rise, and Resources staff will be balloted solely on pensions.