Forum for former BBC staff

Forum for former BBC staff
http://www.ex-bbc.net/cgi-bin/yabb/YaBB.pl >> News and Comment >> 2.7%-RPI http://www.ex-bbc.net/cgi-bin/yabb/YaBB.pl?num=1389694692 Message started by EyeTunes on Jan 14^th, 2014, 10:19am

Title: 2.7%-RPI
Post by EyeTunes on Jan 14^th, 2014, 10:19am

Thus- that's the "rise" in the pension this year-yes?

Title: Re: 2.7%-RPI
Post by Administrator on Jan 14^th, 2014, 11:34am

This is taken from Ariel, January 14th, 2013:

Pension Scheme deficit up to £2bn
Members will not have to pay more into their pensions

The BBC Pension Scheme deficit has grown by £900m in the last three years.

There is now a £2bn shortfall - up from the £1.1bn in 2010 that triggered the closure of the final salary schemes.

But the figure - released as part of the latest triennial valuation by actuaries - is an improvement on the £2.6bn deficit recorded in the scheme's annual report last year.

'It is disappointing that the deficit has increased since the 2010 valuation but not unexpected given the economic conditions,' Bill Matthews, chairman of the trustees, told members.

There will be no changes to pension arrangements, however, and members will not be required to pay more. Nor will the poor performance affect money available for programmes.

The BBC has been preparing for this situation for the last couple of years and has budgeted accordingly.

It has agreed a new plan with trustees to make good the deficit (liabilities minus the value of assets) by 2026.

It will see the Corporation contribute £740m towards the shortfall over the next four years - almost double the £375m that had been agreed as part of the 2010 recovery plan, that was due to end in 2021 but has now been superseded.

'I believe the schedule of payments, which is set out in the report to members, strikes a balance that is both appropriate for members and does not undermine the BBC's ability to support the scheme,' said Matthews, who assured members that there was no danger that the scheme would not be able to pay out to its pensioners in the future.

A BBC spokesperson said: 'We are pleased that by working collaboratively with the Pension Trustees we have finalised the valuation ahead of time, particularly in this economic environment which is challenging for large pension schemes like the BBC's.

'By anticipating this valuation result we have agreed a sensible and affordable plan to address the deficit, without adversely affecting programmes or pension scheme members.'

An improved return from investments over the last few years has been mitigated by extremely low interest rates and gilt yields, according to the report. The latter reached their lowest point in history at the time of the valuation. Meanwhile, life expectancy of BBC pensioners continues to rise, increasing the scheme's liabilities.

But trustees believe the situation would have been worse had they not taken controversial action after the 2010 valuation.

This included a 1% limit to increases on pensionable salary for people in the three versions of the scheme - Old Benefits, New Benefits and CAB 2006 - with existing members given the opportunity to switch to a new CAB 2011 scheme. The action prompted union protests and strike action.

The scheme was also closed to new members and has therefore been spared the future pension liabilities of around 7000 new joiners.

In the report, the trustees say they will continue to derisk the scheme, moving towards more bonds and low risk investments while retaining sufficient assets to pay current pensions.

The scheme currently has around 14,000 members. Other BBC staff who pay into Lifeplan pensions or the government's National Employment Savings Trust are not part of the BBC Pension Scheme.

Title: Re: 2.7%-RPI
Post by Knocking On on Jan 14^th, 2014, 1:55pm

Unless that is BBC Pensions use the new index known as RPIJ which came into use as a National Stastistic in March 13.

Dec RPIJ was 1.9%

Interesting how this morning BBC and Sky were only concerned with CPI no mention of RPI until later...there is also a new measure of CPI too, known as CPIH which also has been used since March 13 and was also 1.9% in Dec.

As the BBC News website quotes RPI as 2.7% I would hope that Pensions would use that figure.

Apparently the new indexes are calculated the same as other european countries calculate theirs.....I would have thought the government would have liked to have announced CPIH as 1.9%.....looks better than 2%!

Now that inflation has reached the magic 2% I wonder if our savings will be given a boost by an increase in the bank rate.

If the rates do go up, as BBC pensioners we will not have done too bad having scooped a higher annual increase via RPI and also benefiting our savings by an increase prompted by a low inflation figure!.

Seems in the financial press the waiting game for umemployment may not be too long either to prompt an increase. Although the lower unemployment figure in Dec was artificial as most of the people coming off JSA were going into seasonal Xmas McJobs....I think maybe February would be a good month to watch for a truer unemployment figure.

Don't forget fellow pensioners that the personal Tax allowance changes to £10k in April too.

Title: Re: 2.7%-RPI
Post by Dickie Mint on Jan 14^th, 2014, 2:56pm

The whole caboodle re pensions valuation is here.

And from previous years discussions, I seem to recall we will get the December RPI - 2.7%.

Richard

Title: Re: 2.7%-RPI
Post by chris west on Jan 14^th, 2014, 4:53pm

So has the BBC pension deficit in fact shrunk? Is the 2013 figure of £2bn the "official" figure, and last year's £2.6 bn an "unofficial" figure? Is the scheme going in the right direction? Unofficially....

Title: Re: 2.7%-RPI
Post by EyeTunes on Jan 14^th, 2014, 6:14pm

Re the comments above-I believe the forthcoming rise in the basic rate tax allowance is balanced off by the a slight lowering of the higher rate threshold.
Yes indeed, this morning both BBC News and Sky focussed entirely on the CPI 2% "good news" of inflation seemingly falling. That of course was at 09.30-10.00am before the political commentators had digested it.
The electorate is not fooled though--is it?

Title: Re: 2.7%-RPI
Post by Dickie Mint on Jan 14^th, 2014, 7:56pm

The Telegraph has published a BBC bashing article about it!

They've thoughtfully not mentioned the pension holiday the BBC gave itself some years ago. I wonder how that reduction in their contribution impacts on the deficit?

The whole article is biased but some bits are laughable.

"However the BBC has decided not to ask its long-serving staff – who, in common with much of the public sector, enjoy guaranteed pension benefits when they retire – for any additional contributions."
As a result, licence-fee payers will be expected to foot the entire bill, at an additional cost of £365million over the next four years. "

"The source added that about three-quarters of the BBC’s pension liability has accrued to people who are no longer contributing to the scheme, making any new burden on existing employees proportionally greater. "
....they're called Pensioners...

Richard

Title: Re: 2.7%-RPI
Post by ianpollock on Jan 14^th, 2014, 9:27pm

That Telegraph article really is a confection of idiocy and ignorance. Firstly, the BBC earns a lot of income, more than a billion pounds a year, from its commercial operations. That helps pay the pension contributions of the BBC, not just the licence fee. Secondly, most of the cost of the scheme is indeed to pay those who have already retired and taken their pensions. There would be more, younger, contributors but for the fact that the BBC closed the scheme to new entrants. Thirdly, I once calculated that the BBC saved, in current terms, about £2bn by awarding itself a 19-year partial contribution holiday. Guess how big the deficit is now? The chicken has come home to roost. Fourthly, the deficit is due mainly to an expectation that capitalist investments (so beloved of the Telegraph and its ilk) will be less remunerative in the future. Is the BBC pension scheme to blame for that?

Title: Re: 2.7%-RPI
Post by JakeF on Jan 15^th, 2014, 10:22am

The Pension Scheme normally (formally) confirms the Dec RPI rate early in the year. Interestingly the Office of National Stats is airbrushing the old RPI figure out of some of its data because (I'm a bit of a cynic about official data) they're desperate to headline the lower CPI all the time.
I was amazed the dratted Daily Mail wasn't or hasn't been all over yesterdays story - easy bit of BBC bashing to copy and paste the Telegraph piece

Title: Re: 2.7%-RPI
Post by EyeTunes on Jan 15^th, 2014, 4:00pm

The Daily Mail has used the BBC Pension Scheme report as an excuse to regurgitate stories of big pay-offs and for top managers. They have made the link between the deficit and those with swag bags!

Title: Re: 2.7%-RPI
Post by Knocking On on Jan 15^th, 2014, 7:45pm

I see too that the Guardian this morning ran a story about the pension deficit, saying that the BBC will be using licence payers money to plug the gap instead of increasing contributions from current members.

What has not been mentioned though is the fact that US BBC pensioners are actually licence payers too and as such therefore each month are paying towards plugging the deficit.