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Pensions black hole:
BBC staff will vote on strike
action over the retirement crisis |
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AN autumn and early winter of discontent are looming at the BBC, thanks to the apparent mismanagement of its pension fund. Worryingly for staff, it transpires that the corporation took a 15-year employer contributions "holiday", saving it around £1bn between 1988 and 2003!
Thus, by April 2009 the fund was in the red to the tune of £470m when it should have been in the black by more than £500m. This “holiday” was never made clear to staff who naively paid into the fund believing their contributions were being matched by the corporation. After all, that was the agreement.
Boaden catalogue
Who made the decision to take the holiday, and on what basis, has not been explained. Helen Boaden, head of news, has been wandering around Television Centre shaking her head in disbelief at the crisis and sympathising with staff whose retirement plans have taken a serious setback. On £330,000 per year, Boaden should get by – but as she is a fund trustee it is strange that she seems to have so little clue as to how the disaster came about.
Unions, including the NUJ and Bectu, are balloting members on strike action over the pensions crisis, and the BBC is leaving staff with a Hobson’s choice: either take industrial action or plump for the destruction of their pension. The only options on offer are to stay in the fund and have any future increases frozen at 1 percent a year, or leave it altogether for a new, devalued pension fund where future increases are tied to inflation and there is no guarantee of a decent amount at the end.
The new scheme is a very poor alternative to the main fund, allowing the corporation to cut its own contributions from 18 percent as it stands now for the final salary scheme to 7 percent or less. If it gets its way, the BBC stands to make huge future gains once most of the “Old Benefit” members (over 50) have left.
Senior managers on vast salaries have little to fear from the changes, of course. The pot of deputy DG Mark Byford, aka “Bypass”, looks likely to reach £8m, giving him an annual income of anything between £229,000 and £400,000.
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