This is taken from Ariel, January 14th, 2013:

Pension Scheme deficit up to £2bn
Members will not have to pay more into their pensions

The BBC Pension Scheme deficit has grown by £900m in the last three years.

There is now a £2bn shortfall - up from the £1.1bn in 2010 that triggered the closure of the final salary schemes.

But the figure - released as part of the latest triennial valuation by actuaries - is an improvement on the £2.6bn deficit recorded in the scheme's annual report last year.

'It is disappointing that the deficit has increased since the 2010 valuation but not unexpected given the economic conditions,' Bill Matthews, chairman of the trustees, told members.

There will be no changes to pension arrangements, however, and members will not be required to pay more. Nor will the poor performance affect money available for programmes.

The BBC has been preparing for this situation for the last couple of years and has budgeted accordingly.

It has agreed a new plan with trustees to make good the deficit (liabilities minus the value of assets) by 2026.

It will see the Corporation contribute £740m towards the shortfall over the next four years - almost double the £375m that had been agreed as part of the 2010 recovery plan, that was due to end in 2021 but has now been superseded.

'I believe the schedule of payments, which is set out in the report to members, strikes a balance that is both appropriate for members and does not undermine the BBC's ability to support the scheme,' said Matthews, who assured members that there was no danger that the scheme would not be able to pay out to its pensioners in the future.

A BBC spokesperson said: 'We are pleased that by working collaboratively with the Pension Trustees we have finalised the valuation ahead of time, particularly in this economic environment which is challenging for large pension schemes like the BBC's.

'By anticipating this valuation result we have agreed a sensible and affordable plan to address the deficit, without adversely affecting programmes or pension scheme members.'

An improved return from investments over the last few years has been mitigated by extremely low interest rates and gilt yields, according to the report. The latter reached their lowest point in history at the time of the valuation. Meanwhile, life expectancy of BBC pensioners continues to rise, increasing the scheme's liabilities.

But trustees believe the situation would have been worse had they not taken controversial action after the 2010 valuation.

This included a 1% limit to increases on pensionable salary for people in the three versions of the scheme - Old Benefits, New Benefits and CAB 2006 - with existing members given the opportunity to switch to a new CAB 2011 scheme. The action prompted union protests and strike action.

The scheme was also closed to new members and has therefore been spared the future pension liabilities of around 7000 new joiners.

In the report, the trustees say they will continue to derisk the scheme, moving towards more bonds and low risk investments while retaining sufficient assets to pay current pensions.

The scheme currently has around 14,000 members. Other BBC staff who pay into Lifeplan pensions or the government's National Employment Savings Trust are not part of the BBC Pension Scheme.

The whole caboodle re pensions valuation is here.

And from previous years discussions, I seem to recall we will get the December RPI - 2.7%.

Richard

Re the comments above-I believe the forthcoming rise in the basic rate tax allowance is balanced off by the a slight lowering of the higher rate threshold.
Yes indeed, this morning both BBC News and Sky focussed entirely on the CPI 2% "good news" of inflation seemingly falling. That of course was at 09.30-10.00am before the political commentators had digested it.
The electorate is not fooled though--is it?

That Telegraph article really is a confection of idiocy and ignorance. Firstly, the BBC earns a lot of income, more than a billion pounds a year, from its commercial operations. That helps pay the pension contributions of the BBC, not just the licence fee. Secondly, most of the cost of the scheme is indeed to pay those who have already retired and taken their pensions. There would be more, younger, contributors but for the fact that the BBC closed the scheme to new entrants. Thirdly, I once calculated that the BBC saved, in current terms, about £2bn by awarding itself a 19-year partial contribution holiday. Guess how big the deficit is now? The chicken has come home to roost. Fourthly, the deficit is due mainly to an expectation that capitalist investments (so beloved of the Telegraph and its ilk) will be less remunerative in the future. Is the BBC pension scheme to blame for that?

The Daily Mail has used the BBC Pension Scheme report as an excuse to regurgitate stories of big pay-offs and for top managers. They have made the link between the deficit and those with swag bags!