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Effect on scheme if BBC is privatised (Read 2540 times)
Dickie Mint
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Effect on scheme if BBC is privatised
Aug 20th, 2014, 9:30am
 
The annual Pensions 2014 arrived in the post today and I noted page 4 and the BBC contributions designed to get the scheme to be self sufficient by 2028.  The BBC intends to make further payments beyond a 13 year plan if not.

I've emailed the scheme with the following:

With a BBC Privatisation Bill before Parliament, how would this affect the BBC Pension Scheme?

Would it impact in any negative way, for example would increases change, would the privatised BBC be allowed to reduce its contributions or even sell the scheme off?
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Richard
 
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ianpollock
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Re: Effect on scheme if BBC is privatised
Reply #1 - Aug 20th, 2014, 7:37pm
 
All that would depend on the provisions of any BBC Privatisation Act. It might, for instance, say that any new owner of the BBC had to take on its pension scheme, and all its assets and liabilities, lock, stock and barrel. Or the process might, as with the recent privatisation of the Royal Mail, see the government nationalising the pension scheme. That meant taking it over, guaranteeing to pay all current and accrued (but not yet taken) pensions, absorbing all the scheme's assets, but leaving it up to the new owner to provide a scheme for all future service. I suppose a BBC privatisation could deliberately separate the scheme from the BBC, and leave the scheme to fend for itself. That would mean, in practice, closing it to all future accrual, as there would be no employer to keep on paying employer contributions. If the scheme at that point had a surplus the trustees might be bold enough to keep it going (but with no further contributions or further pension accrual) as a free-standing fund, continuing to invest the assets in the hope of generating enough money to pay all existing and accrued pensions. On the other hand, if there was a big enough deficit, the scheme would have to be declared insolvent, and it would fall into the lap of the Pension Protection Fund. Funding of the "safety net" provisions of the PPF would depend on the PPF's ability to invest all the assets it has absorbed from insolvent schemes in the past few years, and its ability to levy all the other private sector pension schemes to make up any shortfall. Even by the poisonous standards of vindictive right-wing Tory MPs and BBC haters (yes Rob Wilson, MP for Reading East, I am talking about you) it would probably be a step too far to deliberately trigger a pension scheme's insolvency, so I doubt that would happen. But all scheme members would have to be on their guard.
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