See;
http://www.ipe.com/news/funding/bbc-scheme-seeks-to-cap-inflation-increases-with...This seems to indicate that the offer is to be made to 16,900 existing pensioners (Old Benefits Scheme only ?) but there is a comment later about those over 80 might be offered it so it is a little unclear. I would guess therefore that initially those over 80 might be excluded, perhaps because the increase to be offered would look quite small in % terms owing to the expected term to death (lovely phrase !) being quite small hence the potential gain to the BBC being similarly tiny.
Many other companies have gone down the PIE route, you can search around the www for some background info. Here is one from BT with a case study;
http://www.btpensionersreconnect.co.uk/Pension%20Increase%20A%20Case%20Study2.pd...Note in that case the increase offered was less than 20% although complicated by a partially indexed bit.
Here is a KPMG document aimed at companies. Note the term "Balanced Deal Percentage".
https://www.kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/Documents/PDF/...Here is a link to what the Pension Regulator has to say.
http://www.thepensionsregulator.gov.uk/guidance/incentive-exercises.aspxI draw your attention to this section;
"Risks associated with incentive exercises
Where a member accepts an IE offer, an employer’s pension liability or risk is likely to be reduced. Conversely, for members the risk that they will suffer a loss in the long run will usually increase if they accept an offer. Losses could be due to factors specific to the individual (eg life expectancy or investment choices) or the overall economic and market environment in future. An IE offer is often set at below ‘cost-neutral’ terms in order to reduce an employer’s pension liabilities, and in this situation there is a heightened risk that members will be worse off.
A minority (and, very possibly, a small minority) of members may have personal circumstances which result in them being in a better position through accepting an IE offer
IE offers can create risks for trustees and employers as well. These include legal and reputational risks materialising many years after the IE has taken place.
IEs can be costly. There is the cost of the incentive itself. Also there is a cost to obtaining advice (legal, financial, and actuarial). Designing IEs to meet appropriate standards (including those in the Industry code), can present significant challenges which come with a cost implication."
Oh dear, it is all getting very heavy and technical isn't it . Finding it hard to take all this in ? Would a pretty coloured diagram help ? Here you go !
http://beaufortconsulting.co.uk/pietest/key-considerations/your-health-and-life-...Simples ! all you have to do is work out whether your life expectancy is average, better than average or worse than average.
Edited due to broken link.
Edit2 added KPMG document link
Edit3 added link to government pensions regulator +copy text
Edit 4 added link to pretty coloured diagram