The BBC is to close its defined benefit (DB) pension scheme to new joiners from 1 December 2010.
Existing members will remain in the scheme and continue to build up benefits under the current structure. However, from 1 April 2011 future salary increases for calculating pension benefits will be limited to 1% per year.
A new defined contribution (DC) pension scheme will be introduced for new joiners. Existing scheme members will be given the choice of joining the new DC scheme or remaining in the DB scheme under the changed terms.
These changes follow the publication of the 2009 interim valuation by the broadcaster’s pension trustees, which showed that the scheme’s deficit had increased from £470 million in 2008 to around £2 billion.
The BBC will now undertake a 90-day consultation period with staff and unions between 1 July and 30 September 2010.
Zarin Patel, chief financial officer of the BBC, said in his blog: “The scheme’s assets, like those of many other pension schemes, have been affected by market volatility following the global economic downturn.
“Although financial markets have improved during 2009/10, the investments in the scheme have not returned to previously expected levels and the outlook for the future remains uncertain. In addition, with people living longer, the cost of funding their pensions inevitably increases.
“We have spent over 18 months working to find the best solution for our staff. I believe the solutions we have proposed today will deliver a pension scheme that is sustainable, affordable and flexible for BBC staff and the licence fee payer.”
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