The chairman of the BBC Pension Trustees, Jeremy Peat, has written to Ariel, defending the Trustees' performance.  This is the text of his letter:


Dear Sir

I have been asked for clarification on some of the statements made at the members' meeting on 14th September, in the light of comments made during the ring main session with staff on 16th September, as there may appear to be some inconsistency in what Zarin Patel and the Trustees have said.

I believe that this stems from a difference in perception and interpretation by the BBC and the Trustees; rather than any contradiction. However, clarity in these important issues is clearly essential.

Zarin Patel said that the BBC had been openly discussing pension reform with the Trustees keeping them informed all the way through.

Staff could have taken that to mean that the Trustees were, at an early stage, aware of and consulted on the proposal to cap the future growth of pensionable pay at 1% p.a. They were not.

In December 2009 the BBC informed the Trustees that it was reviewing pension provision as it wished to reduce cost, risk and unpredictability whilst continuing to provide an affordable salary related pension scheme for employees. It indicated that it would share its thinking with the Trustees at the appropriate time. The Trustees were given no further details and there were no discussions with us until we were informed about the1% cap proposal, in confidence, shortly before members were told.

The BBC made it clear to the Trustees from the outset that, as far as the 1% cap was concerned, it intended to do this contractually, without changing the rules. By taking this route they effectively by-passed the Pension Trustees. We took legal advice from a leading QC, who confirmed that the Trustees had no power to block the proposal. Had it been necessary for the Trustees to approve a cap on pensionable salary increases by way of a rule change then, as I said at the members' meeting, the Trustees could not and would not have agreed to make such a change.

Zarin Patel also said on Thursday that she wanted CAB2011 to be administered by the Trustees and that the BBC had written to them "formally" asking them to consider administering it.

The BBC did inform us that it was thinking about setting up an additional career average benefit section which it intended to ask the Trustees to administer. On the Friday before Mark Thompson's 13 Sept email to staff, I received a letter from the BBC which included the same outline details of CAB2011 as were sent to staff. It went on to say that it was the BBC's intention, subject to the Trustees agreement, that the alternative career average pension option would be set up as a separate section within the Scheme.

So, yes the Trustees do know that the BBC would like them to administer CAB2011 but, by the BBC's own admission, the fine detail has still to be worked out before the Trustees and their advisers can consider the implications of agreeing to administer a new section and a decision is reached.. At this stage it is a notice of intention not a formal request.

We face great challenges in dealing with the pension deficit but I am confident that we can build on the good track record for collaborative working between the Trustees and the BBC mentioned by Zarin. Along with colleagues on the Trustee board, I look forward to discussing the new section with Mark, Zarin and Lucy.

Jeremy A Peat
Chair of Trustees