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Pensions: "final offer" (Read 5101 times)
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Pensions: "final offer"
Oct 7th, 2010, 12:21pm
 
This email from Zarin Patel, Chief Financial Officer, and Lucy Adams, Director, BBC People, has been sent to all staff:

From: Internal Communications
Sent: 07 October 2010
Subject: Pensions offer - more details


Dear all,

Following Mark’s email of last Friday we wanted to outline the final offer we have made to the unions regarding the changes to the pension proposals.

We have listened carefully to your points throughout the consultation process and we have received input from the unions. The key issues that you asked us to consider in the consultation were:

the 1% limit on increases in pensionable salary

the issue of inflation ‘protection’ on benefits already built up

the desire for a lower risk alternative to the defined contribution plan.

The additional proposal for a new career average benefits arrangement CAB2011 announced on September 16th included no 1% limit on increases in pensionable salary and an inflation ‘protection’ at the lower of CPI (consumer price index) and 2.5%. For staff moving into CAB 2011,  pensions already built up in their existing defined benefits scheme would be protected broadly in line with inflation.

Following further discussions with the unions and feedback from staff we have put forward the following amendments to CAB 2011 as a final offer to the unions:

Reduce employee contributions in CAB 2011 from 7% to 6%;

To strengthen the annual increase for pensions in payment from the lower of CPI and 2.5% to the lower of CPI and 4%.

To strengthen the discretionary inflation ‘protection’ from the lower of CPI and 2.5% to the lower of CPI and 4% for the yearly revaluation of benefits built up in CAB 2011.

There would be joint discretion between the scheme trustees and the BBC to award a higher yearly revaluation in years of high inflation, subject to affordability and the scheme’s investments performing in line with expectation.

A way of addressing the concerns which have been expressed by some staff about no AVC (Additional Voluntary Contributions) facility in CAB2011.  This would be capped at a maximum cost of £5m per annum to the BBC. We are talking to the unions about the best way of making this happen and will provide more details of this offer in due course.

A commitment to revisit elements of the pension reform proposals in the event the pension deficit at the April 2010 valuation (to be finalised and communicated no later than 30 June 2011) falls and stays below £1billion (before pension reform changes are factored in).

We have also reiterated our pay offer of a flat rate increase of £475 per annum to basic salary (excluding London Weighting) for those staff who earn a basic salary of less than £37,726 per annum. This will be backdated to August 2010.    

What happens next?

We have made clear that this is our final offer to the unions and we cannot make any further adjustments which would mean further cost. If we had gone any further we would have been in danger of impacting jobs and services. If this offer is not accepted by the unions it will be withdrawn.

The unions have now said that they will hold a consultative ballot on the offer amongst their members. We hope that those of you eligible to vote in the ballot will recognise that the BBC has responded to consultation feedback whilst maintaining affordable and fair pensions into the future.

The consultation is open for members until November 15th and we would like you to continue to offer your feedback on all the proposals.



Help and support

The online modeller is being updated to reflect the changes to inflation ‘protection’ before retirement. Further details of how the changes will apply to the modeller can be found when logging in. The updated modeller will be ready to use from Friday morning. You can remind yourself about the original details of the CAB 2011 arrangement and the ongoing consultation process here.

The programme of seminars around the country will continue. You can also contact the pensions service line on: 029 2032 2811 or (internal) 01 22811 or via email on myPension@bbc.co.uk.

This is the best deal we can afford. We hope you will support it.

Kind regards,

Lucy Adams

Zarin Patel

Director, BBC People

Chief Financial Officer

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Re: Pensions: "final offer"
Reply #1 - Oct 7th, 2010, 2:08pm
 
Am I correct in taking it that the annual increase for pensions in payment are to be either the CPI or 4% max (whichever is lower)?.
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Re: Pensions: "final offer"
Reply #2 - Oct 14th, 2010, 5:47pm
 
I posted a thread on 1st October asking
"BBC pensions: unions win improved offer
Oct 1st, 2010, 5:35pm

http://www.bectu.org.uk/news/994

Is the bit that says :
"The lower of CPI and 4% for pensions in payment in CAB 2011" better or worse for us?
Or does it not affect us?
"

After further research I think not!
From: http://www.bbc.co.uk/mypension/sites/updates/pages/100916.shtml

"Pensioners and former employees (deferred members) are not affected by the proposals."

And from :http://downloads.bbc.co.uk/mypension/en/transcript_of_active_members_meeting.pdf...  page 18:
      "....it could set up a brand new scheme ......staying in Old Benefits, New Benefits, CAB......"
Which suggests CAB2011 is self contained as a new Pension Scheme, to which we would not be transferred.

Thus we'll lose out in terms of in payment pension increases!!

Richard
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Regards,
Richard
 
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