Administrator
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This is taken from the FT:
Unions warn BBC on pensions shake-up By Ben Hall, Political Correspondent Published: April 22 2006 03:00
The BBC has unveiled plans to close its final salary pension scheme to new members and raise the normal pension age from 60 to 65, prompting warnings of industrial action from the broadcasting unions.
Mark Thomson, BBC director-general, said the changes, which include higher contributions by the corporation and about 21,000 staff, were necessary to ensure the pension scheme remained "secure and affordable". However, experts said the changes were unlikely to address an underlying deficit in the scheme.
The state-funded broadcaster, which is negotiating with the government on a new licence fee, is the latest large employer to announce a scaling back of pension benefits. Rolls-Royce, the aerospace group, started talks this month to close all its final salary schemes to new members while promising a £500m one-off payment and higher contributions to address a combined scheme shortfall of £1.3bn.
British Airways last month unveiled measures that included a cap on benefits and longer working in return for a £500m employer contribution, to plug a £2bn scheme deficit.
Union leaders protested that, unlike those two companies, the BBC's scheme, which is ultimately funded by the licence fee payer, had a £13m surplus. Bectu, the broadcasting union, promised to organise "widespread resistance" to the changes. The BBC was hit by industrial action last year when journalists and technicians went on strike over job cuts.
Jeremy Dear, general secretary of the National Union of Journalists, urged the BBC to halt the plans. "What is clear is we will not accept attempts to make staff pay for the BBC's failure to properly fund the scheme. The pension scheme is cash-rich, in surplus and the BBC admit there is no crisis - so why are they seeking to penalise staff in this way?" The BBC said the surplus had shrunk rapidly from £441m in 2002, half of the change due to increased longevity.
Under the proposals outlined to staff yesterday, the BBC's final salary scheme will close to new members on August 31 and will be replaced with a career average scheme, which the unions say will be 30 per cent less generous. John Ralfe, a pensions expert, said this would still be better than the defined contribution schemes replacing final salary benefits in much of the private sector.
The BBC is proposing to increase its contributions to the new scheme from 7.5 per cent this year to 17.3 per cent in April 2007. It wants staff to increase their contributions to 7.5 per cent from April 2007 and possibly to 9 per cent from 2008.
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