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BBC Pensions - to continue using RPI (Read 13000 times)
JohnW
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BBC Pensions - to continue using RPI
Dec 12th, 2011, 7:06pm
 
I'm sure that this subject has been raised before ...  but for the benefit of any that don't get the publication, I see (in the latest Prospero, Dec 2011) that Jan Killick, Head of BBC Pensions, has confirmed that "pensions in payment from the Scheme will continue to be linked to the RPI for Old Benefits, New benefits and CAB2006 members, ..."
She's quoted as saying "Within the Scheme's Trust Deed and Rules it makes reference to RPI, so that is hard-wired into the Scheme's Rules, and is not something that can be changed."
That may make a few members somewhat happier!
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John-Westbury  
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ianpollock
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Re: BBC Pensions - to continue using RPI
Reply #1 - Dec 28th, 2011, 10:38pm
 
As a former elected trustee of the scheme, I am not so re-assured. The rules http://downloads.bbc.co.uk/mypension/en/45th_deed.pdf, in different places, say this:
1) "Index" means (a) in relation to Career Average Benefits 2006, New Benefits and Old Benefits, the Government index of retail prices for all items, or such other published index of prices which the Trustees and the BBC may agree will be the Index instead, following a change in the compilation of the Government index;

2) the trustees and the BBC cannot change the rules as they affect pensioners unless "the actuary certifies that the alteration or modification does not substantially prejudice the interests of such person."

So, the trustees and the BBC can indeed adopt a different measure to uprate pensions, in certain circumstances and if the scheme actuary agrees such a move does not substantially prejudice the pensioners' interests. That seems like a big obstacle to overcome. But suppose you are the DG, you find finances are tight, and you proclaim to the world that the only thing standing between death and disaster is a cut in the cost of running the scheme to save the BBC money. As DG you argue that otherwise the BBC will become insolvent and the scheme will become insolvent too, and will have to fall back on the pension protection scheme to pay the pensions. At that point, do you as trustees and actuary call his bluff, or give in and re-write the rules to allow much smaller pension increases, perhaps in line with CPI?
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JohnW
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Re: BBC Pensions - to continue using RPI
Reply #2 - Dec 30th, 2011, 1:28am
 
Ian,
Thanks for chiming in with this pertinent observation, given your undoubted credentials in the field.

I take your point, but I was merely quoting what Head of Pensions Jan Killick herself was quoted as saying (in December's Prospero).
I'd be rather (more?) worried if I thought that the difference between a pension increase related to CPI rather than RPI was about to cause the downfall (insolvency?) of our Pension scheme! The reported 'shortfall' between the present position and that of "fully funded" didn't seem to indicate that 'death and disaster' (what a lovely term!!) might possibly be just around the corner - but then with the world banking situation as it presently seems to be, I don't suppose I should be entirely surprised. As Tony Hancock used to say "The whole world's gone mad!" - I just hope it all lasts long enough, however long that may ultimately be!! And even 'Fred, the shred' had to give some of his pension back to RBS. Hmmm.
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John-Westbury  
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ianpollock
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Re: BBC Pensions - to continue using RPI
Reply #3 - Dec 31st, 2011, 11:02am
 
Hello John,

all those are fair points, but I am just cautioning against believing that a change from RPI is impossible, because the rules say so. The rules do not, in fact, say so, and it is not impossible, albeit likely only in extreme circumstances. As a current member of staff who has been mugged in public by the current senior executives forcing us to move from our current pension scheme sections to a new and abysmal "career average" section, I would not put it past them to argue anything at all in the future if they thought they could get away with it. May I advise you to keep an eye on a High Court hearing on, I think, January 16th? The NUJ and the Musicians Union are challenging the lawfullness of the BBC's recent changes to the scheme. It should be an interesting hearing, to say the least.
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Knocking On
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Re: BBC Pensions - to continue using RPI
Reply #4 - Dec 31st, 2011, 2:04pm
 
I echo my post RPI/CPI of March 17th.

As I concluded, it could end up a "Moral Issue" for the trustees regarding changing the index for pensions already in payment.

They could however use CPI for "new" pensioners which would be in tandem with the "new" CAB pension that everyone seems to have to have.
This of course would create a two tier pension scheme which would probably over complicate things plus having on the face of it being an unfair system.
A pensioner retiring on say April 4th getting RPI whereas a pensioner retiring on April 5th would get CPI etc.

Of course if we are to believe the BoE, this problem could be irrelevant as inflation will be so low as not to worry about!!

This scenerio alone would give the trustee's the arena in which to change to CPI as they would probably say the difference between RPI and CPI is minimal....of course if that was sited it would be easy to say "So why change it then".

I can see inflation dropping in 2012, as really it was manipulated up in a big way by the increase of VAT.....however if it does go down will it stay down?

The worries  regarding this whole subject for us pensioners will not subside until someone from BBC Pensions actually states in plain english that the pension increases will NEVER be calculated using CPI.....

Sorry got distracted.....a pig flew past my window!

Anyhow what ever the out come ........ Happy new Year to you all.
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