Category: Βι¶ΉΤΌΕΔ
Date: 21.04.2006
Printable version
Announcement from Βι¶ΉΤΌΕΔ Director-General
Mark Thompson, sent to all Βι¶ΉΤΌΕΔ staff, Friday 21 April 2006.
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Subject:
Important news about the Βι¶ΉΤΌΕΔ Pension Scheme
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For some time now there has been widespread coverage about pensions and the funding difficulties many companies are facing.
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Many organisations have decided to reduce the level
of benefits, whilst others have closed their final salary schemes
altogether.
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The Βι¶ΉΤΌΕΔ's pension provision has also come under scrutiny
- our pensions are important to all of us and I know the speculation
has caused concern among many of you.
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We have now completed an extensive review of the Βι¶ΉΤΌΕΔ Pension Scheme and the 2005 Valuation has also just been finalised, which has helped us to fully assess the options available to us.
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Pressure on the funding of pension schemes has increased for all employers over recent years. Improved life expectancy, anticipated lower investment returns, plus mounting legislative requirements have all served to increase the cost of providing a pension.
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The Βι¶ΉΤΌΕΔ Pension Scheme is currently healthy but it is reaching the end of its surplus and the risks associated with funding a final salary scheme on the scale of ours have affected the affordability of the Scheme.
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The Βι¶ΉΤΌΕΔ Pension Scheme has a special place in our reward package and it provides valuable benefits. I also believe it's important to the Βι¶ΉΤΌΕΔ as an organisation - helping us attract and retain the talented people we need to provide great services for the public.
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But the pressures on the scheme mean that for it to remain secure and affordable, we have to make some changes both to its benefits and to the level at which it is funded by the Βι¶ΉΤΌΕΔ and its members. Doing nothing is not an option.
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If you are an active member of the Scheme you will shortly receive a letter, sent to your home address, explaining the proposals in more detail, but in outline they are:
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Final salary pension benefits will be kept open to all current members and
anyone who joins the Scheme on or before 31 August 2006.
- Contributions
to the Scheme will increase both for members and the Βι¶ΉΤΌΕΔ.
- The Βι¶ΉΤΌΕΔ's contribution
increased on 1 April 2006 to 7.5%. It is proposed that it will increase
on 1 April 2007 to 17.3%.
- It is also proposed that members' contributions
should increase: on 1 September 2006 from 5.5% to 6% and on 1 April 2007
to 7.5%. Member contribution rates will be reviewed again following the
2007 valuation and, subject to approval from the Pension Trustees,
a further increase of up to 1.5% may be needed from 1 April 2008.
- The
normal pension age will change from 60 to 65, but only for benefits
built up after 31 March 2016.
- A new defined benefit 'career average'
section will be introduced in the Scheme for all new entrants
from 1 September 2006.
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I believe that these proposals can both secure the continuation of the Pension Scheme and also strike a fair balance between retention of a highly valued benefit and our responsibility to the licence fee payer. But I'd like to hear your views too.
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A period of consultation starts today, with a view to implementing the proposed changes from September. I encourage you to take the opportunity to share your views on these proposals with us.
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Mark
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