Benefits April 21, 2006

BBC Hikes Pension Retirement Age To 65

April 20, 2006 (PLANSPONSOR.com) - In an effort to maintain the security of its pension, the BBC has announced far-reaching changes to its scheme, including an increase in the retirement age from 60 to 65 and higher staff and company contributions.
Reported by

class=”story”> In addition, the final salary scheme, which covers about 20,000 employees, will close to new members later this year and be swapped with a less generous career average scheme, according to Britain’s The Telegraph.

class=”story”> The Telegraph reports that BBC director general Mark Thompson said in a message sent to all BBC staff that the pension scheme was currently healthy but was reaching the end of its surplus. “[T]he 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 BBC and its members. Doing nothing is not an option,” he said.

class=”story”> Key changes to the pension scheme include:

  • The normal pension age will change from 60 to 65, but only for benefits built up after March 31, 2016.
  • A new defined benefit “career average” section will be introduced in the scheme for all new entrants from September 1.Members’ contributions will increase on September 1 from 5.5% to 6% and on April 1 next year to 7.5%, and then reviewed the following year by the pension trustees.
  • The BBC’s contribution increased on April 1 to 7.5%. It is proposed that it will increase on April 1 next year to 17.3%.
  • Final salary pension benefits will be kept open to current members and those joining the scheme on or before August 31.

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