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Broadcasters' Pension Woes (Read 3047 times)
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Broadcasters' Pension Woes
Jul 21st, 2010, 8:50am
 
This is from "The Guardian"

ITN faces court challenge over pensions

A 'rescue plan' to partially fix a £56m deficit is being disputed by the fund's trustees. And trouble is brewing at the BBC …

Trustees are to seek a high court ruling on the legality of the proposed changes.
ITN is facing a high court legal challenge over plans to dramatically reduce pension payments made to the families of former employees.

Executives want to push the changes through as part of a "rescue plan" designed to close a £56m pension deficit that threatened to bankrupt the news provider.

ITN will file accounts this week that are expected to show it lost £4.2m in 2009, compared with a pre-tax profit of £4.4m the previous year.

Its chief executive, John Hardie, has written to staff telling them that a "discrepancy" in the ITN scheme, which was closed to new members in 2002, has resulted in overpayments to next of kin when employees died in retirement.

ITN wants to change the way the scheme is administered but the fund's trustees are to seek a high court ruling on the legality of the proposals.

They are likely to apply for a hearing at the end of the year, although it could be 12 months before the case is heard and the dispute is resolved.

The spat illustrates the difficulty of closing or modifying generous final-salary pension schemes.

The BBC is currently facing possible industrial action after it announced it will close its scheme to new entrants and reduce its value to existing members.

Five unions, including the NUJ and Bectu, are threatening to force key events such The Last Night at the Proms off air by scheduling strike action to coincide with the BBC's coverage.

The ITN scheme continues to pay half its members' pensionable salary to a dependant if they die in retirement.

The amount they get is based on the size of the annual payment they received on the date of their death. However, the rules of the scheme state it should be based on the amount paid on the date of their retirement.

Managers at ITN believe they can save an estimated £11m by changing the way the pension scheme is administered and bringing it into line with the rules.

But the trustees have written to the scheme's 1,600 members telling them the changes could reduce the value of a typical pension pot by up to half.

Hardie and the trustees both emphasised that any changes will not be enacted retrospectively. Dependents of deceased pension scheme members who currently get payments will continue to receive the same amount.

In the email to staff, Hardie said the deficit, which stood at nearly £40m at the end of 2008, will increase to £56m even if the changes are implemented.

Under that scenario, it would be wiped out in 15 years.

He said that if payments to next of kin continue to be made in the same way, ITN's pension black hole is likely to increase to £67m and the deficit will not be closed for 18 years.

A spokeswoman for ITN said: "The recovery plans agreed with the trustees should provide reassurance to members that there is an affordable way to fund the scheme for the long term."

ITN is 40% owned by ITV. The Daily Mail & General Trust, United Business Media and Reuters each own 20%.


By James Robinson.

Source:-
http://www.guardian.co.uk/media/2010/jul/20/itn-court-pensions
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