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BBC pension ruling is 'welcomed'

BBC staff on strike at the start of November
Image caption Some BBC staff went on strike for 48 hours in November 2010 in their pension dispute

Unions and the BBC have each welcomed parts of a High Court ruling regarding changes to a staff pension scheme.

The BBC has limited future increases in pensionable pay to 1% a year for some pension scheme members.

It said the judge had ruled that it could, in principle, apply a limit to pensionable pay.

However, the National Union of Journalists, said the ruling found there was a "fundamental flaw" in the BBC's actions.

'Recognition'

The limit was imposed to persuade thousands of employees to move into a less generous section of the scheme.

It prompted a complaint to the Pensions Ombudsman and, when this was dismissed, a subsequent appeal to the High Court that the BBC's actions were unlawful.

The case was brought by John Bradbury, a clarinettist in the BBC's philharmonic orchestra, backed by the NUJ and the Musicians' Union.

The BBC's reading of the judgement was that the judge had come down in its favour.

"The BBC welcomes the court's finding that it can, in principle, apply a limit to pensionable pay," said a spokesman for the BBC.

"The BBC also welcomes the court's recognition that the changes made were options which it offered members to put BBC pension benefits on an affordable and sustainable basis in the future."

But the National Union of Journalists hailed the judgement as a significant step forward.

"We are delighted that this judgement demonstrates what NUJ members have always believed - that there was a fundamental flaw in the BBC's actions when it sought to impose these changes to pensionable pay," said the NUJ's general secretary Michelle Stanistreet.

"The BBC rode roughshod over the rules of the pension scheme in a deeply cynical manner.

"The pensions trustees should never have allowed this to happen without the express agreement of members of the pension schemes."

The NUJ pointed to part of Mr Justice Warren's ruling, on the validity of the BBC's 1% cap on future increases in pensionable pay.

"The BBC had no discretion to determine what part of basic salary or wages fell within the definition of pensionable salary," he said.

"Even reading the definition of basic salary in the 2011 deed and rules in isolation, I do not consider that it gives the BBC the wide discretion which it claims to have."

Discussions

Mr Justice Warren decided not to rule on the linked issue of whether it was lawful for the BBC to impose its will, by threatening to withhold any pay rise at all, from any staff who refused to accept the 1% limitation.

He said that point had not been properly discussed by the Pension Ombudsman.

As a result, he said that there should be further discussions between the two parties.

"I do not propose to determine the way forward at present," he said, in the judgement.

"The parties may be able to reach an agreed position which can be presented for my approval. If agreement cannot be reached, I will hear further argument."

A BBC spokesman claimed that this would not lead to a renegotiation of its policy, but discussion on whether the BBC had acted in good faith.

Deficit

The BBC made changes to the pension scheme despite thousands of journalists going on strike in protest in 2010.

The corporation had argued that the only way to deal with an emerging deficit in its pension scheme, later confirmed at £1.6bn was to make the scheme cheaper to run in the future with less generous benefits for its members.

The BBC is still obliged to plug that gap by making extra payments spread over 11 years.

But staff in two final salary sections, and one career average section, were faced with the choice of staying where they were, with the 1% limit in place, or moving to a second, less generous, career average section.

New joiners to the BBC have, since late 2010, only been offered membership of a money-purchase scheme, which is linked to the success of an investment pot rather than final salary and length of service.

About 8,000 staff eventually decided to move to the new career average section, to escape the effect of the 1% cap, while nearly 8,000 stayed put.

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