Sample letter

August 17, 2011

Here, as promised, is a sample letter (drafted by the NUJ) to send back to HR (or your manager) when you get the BBC’s formal notification of your pay rise, combined with the threat to remove the pay rise if you don’t agree to the changes to your pension. It’s written semi legally, but what it basically means is that you think the BBC’s attempt to bypass the rules of the pension scheme and make a pay rise conditional on you signing away your pension rights is illegal. It then says that you would like to reserve your position subject to any legal action. If you’re not a member of the NUJ just change that bit to say “I understand that the NUJ will be taking steps…”

The BBC will reply with a scary looking email, but my understanding is that you don’t need to do anything more at this stage.


Dear [ ]

Thank you for your letter offering me a pay rise, subject to the conditions set out in the letter.

 I believe that the conditions are unlawful in the following respects.

 1. By imposing these conditions, you are acting in breach of the implied term of trust and confidence. It is clear that you have structured the pay award in a way which seeks to use it for an ulterior purpose, namely to force me either to accept a change in the definition of pensionable salary for the purposes of my pension benefits (a change which you have not been able to achieve lawfully under the power of amendment in the scheme rules) and/or to seek to force me to transfer my membership to the CAB 2011 or LifePlan Scheme. Neither of these objectives is a legitimate use of a pay award which should be used to reflect the effort and hard work that I have committed to the business and to cushion me from the impact of rises in the cost of living.

 2. In structuring the pay award as you have, any acceptance by me would involve a breach of Section 91 of the Pensions Act 1995.

 In the circumstances I propose the following.

 (a) I ask you to keep the offer open for acceptance by me pending a determination by the Court of the matters referred to above. I understand that my trade union (the NUJ) will be taking steps imminently to seek to have these issues of law considered by the Court as soon as possible. In the circumstances I would ask that your offer remain open for acceptance for 7 days after the Court has ruled on these issues (subject, of course, to any appeal, in which case the offer will remain open for 7 days after the final appeal outcome is known).

 (b) If you will not do so then I will accept your offer. However this acceptance would not involve any waiver of my right to have the Section 91 issue resolved by the Court in due course.

 I put you on notice that I consider that any decision to refuse to accept either of the two options identified above would amount to a further breach by you of the implied term of trust and confidence.

 Yours etc.



Pay rise conditions

July 13, 2011

My last post was a little optimistic. I’d forgotten the little detail of the conditions that the BBC is imposing with its pay rise this year. Everyone in a defined benefit pension scheme who is eligible for a pay rise (ie those earning below £60K) will be sent a letter requiring them to accept that their pensionable pay will not rise more than 1% per annum, regardless of their salary. Remember, this was the way that the BBC bypassed the pension scheme trustees, by making the changes to our pensions through our contracts rather than through changes to the rules of the scheme. These “blackmail” letters are highly questionable legally, and the NUJ is investigating whether they can be challenged.

There is also still a chance that there will be a legal challenge to the BBC’s plans. In these circumstances the NUJ is recommending that people accept the new pay deal, but send the BBC a note that basically states that you reserve your position on the 1% cap, subject to legal developments. (If you don’t reply at all, the BBC will deem that you have accepted the pay offer, with strings attached.) If you’re in the NUJ I suggest you contact your NUJ rep as soon as possible to get the full details of the letter. I’ll try and post a sample letter here soon.

If you accept the 1% cap without qualification, then even if there is a successful retrospective challenge to the legality of the BBC’s changes, it is likely that you will be excluded from any improved deal.

Even with all this activity, you still do not have to choose whether to stay in the existing scheme, or opt for one of the two new schemes until the end of the year.


More developments

July 6, 2011

Well, it looks like things are warming up again. I understand that the legality of the BBC’s pension proposals is going to be challenged in court. Not sure of the details yet, so I’ll update more as soon as more information becomes available. Announcements are expected in the next couple of weeks.

This reinforces the view I took in my previous post: there is no need to rush into a decision about which pension option to choose. The decision doesn’t have to be made until the end of the year. Best to wait and see what transpires…


May 2, 2011

Well, it’s been a very long time since I updated this blog, but suddenly there is loads to write about.

First things first: the BBC is trying to dragoon everyone into making a quick decision about your pension options (stay in the current scheme, CAB 2011, or the new defined contribution scheme). However, there is no need to make any decision until the end of 2011. And by far the most sensible thing to do is sit and wait, for lots of reasons. First, the final details of CAB2011 have yet to be published. Second, it is by no means clear that the fight against the BBC’s proposals is over. The NUJ is getting an independent valuation of the deficit (which the BBC declared was £1.6 billion). As I predicted, this was just over the £1.5 billion figure that would have triggered a re-opening of negotiations between the unions and the BBC, but there are many questionable assumptions within the valuation that the union may well challenge. And according to Broadcast this week, there are also potential legal challenges to the BBC’s strategy in the offing.

In the circumstances, waiting until the end of the year is the only sensible course of action.

Where we’ve got to

December 8, 2010

So there is a deal, but there are also some small chinks of light that suggest the fight isn’t entirely over yet. The BBC has made some more concessions about the detail of CAB 2011 to add in more inflation protection, and that’s what all the headlines are about. However, these are minor points that make little difference to the basic point that CAB 2011 is rubbish compared to our existing pensions.

More interesting is the small print. Below is the second last sentence in the ACAS statement.

“…the BBC will delay the implementation of the new reforms until 1 July 2011 if that valuation of the scheme (prior to reforms being taken in to account) is not known by 1 April 2011. If the valuation is known before then the BBC will implement as planned on 1 April 2011.”

Translation: the pension scheme changes will not be implemented until we know the results of the valuation. This is genuinely important, because it means that there is one final window of opportunity to challenge the BBC’s position. Previously the BBC was going to impose the new pension scheme as of early December, ie now.

The statement goes on to say that the BBC will reopen talks with the unions if the deficit is less than £1.5 billion. This is a significant concession, as previously the BBC had said it would only re-open talks if the deficit was less than £1 billion. Unfortunately I think the only reason that the BBC has agreed to this is because it knows the deficit will be over £1.5 billion, and as I’ve pointed out, it can effectively control the size of the deficit and ensure that this is the case.

The NUJ has responded by adding its own qualifications. A resolution passed by union representatives includes the phrase:

“We continue to believe the BBC has failed to make the case for ending the final salary scheme.” This is being read by union activists as keeping open the right to challenge the BBC’s determination to effectively destroy the existing defined benefit schemes. The resolution also says that the union will review its position when the actual deficit is published, and ballot members accordingly.

So, it’s less clear cut than the BBC’s emails would have us believe. There is still a window of opportunity, but it is a pretty small window. I think it will take very, very determined campaigning to persuade ordinary union members to re-open the fight with management if the deficit comes in where management clearly think it will come in.

I can’t help but reflect on the missed opportunity. Even acting alone with just one strike the NUJ frightened management into further concessions. A second solid strike would have been close to causing panic in the higher echelons of the BBC. Instead the sting has been drawn. Whether the level of emotional intensity necessary to sustain strike action, can be generated again remains to be seen.

In the meantime we have a marginally improved CAB 2011, but no hint of compromise from the BBC on reversing its appalling and unnecessary assault on our existing pension schemes.

Almost all over…

December 1, 2010

As this report and Lucy Adams’ email yesterday make clear, the pensions dispute is coming to a close. It looks like the NUJ has won a minor concession on the uprating of pension benefits within CAB2011, we’ll have to wait and see how the union reps and members react.

Fiddling the size of the deficit

November 22, 2010

BECTU and the NUJ are both hoping to persuade the BBC to reopen the whole pensions question if the deficit turns out to be less than £1.5 billion. Quite apart from the implausibility of Mark Thompson agreeing to this, there is another reason for believing that this is not going to happen.

If you read Jeremy Peat’s Q&A in Ariel this last week (he’s the Chairman of the Pension Fund Trustees), he slips in a new point (new to me, at least). Apparently the assumptions that decide the level of the deficit – principally what’s called the discount rate – depend on the trustees’ judgement about the strength of the BBC’s commitment to the pension fund. If the trustees believe that the BBC is no longer as committed to the pension scheme as it once was, the discount rate goes down, and the deficit goes up. In other words, simply by telling the trustees that it is no longer willing to fund its commitments under the pension scheme rules, the BBC is able to increase the deficit, and so justify its decision to cut back benefits!

Even if the deficit looked like it might come in under £1.5 billion, all Mark Thompson has to do is lean on Jeremy Peat (and so far Peat has offered as much resistance as a feather in the wind) and remind him that the BBC is really not that committed to the pension scheme anymore. Down goes the discount rate (which in any case has to be signed off by the BBC), and up goes the deficit.

The more that comes out about this pensions robbery the more disgraceful it looks. We will look back on this and wonder how the BBC ever got away with such a blatant piece of thievery.

PS Tucked away in the next section of his Q&A, Jeremy Peat is good enough to confirm what I and many others have been saying for some time: namely that the BBC could reduce the deficit by giving the pension scheme rights over named assets (such as BBC Worldwide).

Assessing where we are

November 21, 2010

It was depressing this week reading Jeremy Dear’s statements about the “negotiations” with the BBC. It’s all down to improving CAB2011, he said in various different ways. What a tragedy that it has come to this. Despite a 70% mandate to take industrial action, the NUJ leadership prefers to put its faith in negotiations with an employer that has quite clearly ruled out further movement.

The mandate for strike action was about far more than this – it was about trying to defend the existing pension scheme. The only way to ring further concessions out of the BBC is strike action. What’s also so frustrating is that Mark Thompson clearly is worried about the prospect of continued industrial action. Last week he had the senior managers in the newsroom telling him that they couldn’t keep even the skeleton service they managed during the first strikes if industrial action persisted. Yet it’s now very hard to imagine the NUJ membership will be persuaded to go on strike – not when their own leader has retreated so far.

Meanwhile, all the energy to keep fighting is coming from a small band of dedicated activists. This week David Gallagher sent me the results of some freedom of information requests to the BBC. They show that the BBC hasn’t even considered alternatives that would have helped makee the existing pension scheme viable.

– The BBC has “no information” on what the effect of increasing the retirement age would be. In other words, it’s done no work on this key option for helping reduce the pension fund deficit.

– Ditto the effect of altering the measure of inflation used to uprate benefits from RPI to CPI.

– Lucy Adams has conceded in an email that the BBC has done no detailed modeling about the impact of a cap on pensions (for example capping pensions at a max £50K).

Any of these would have reduced the pension scheme deficit, and at considerably less cost to members than any of the options the BBC is about to enforce.

Then there’s the dishonesty. In 2008 the BBC signed a statement of funding principles for the pension scheme. It said the following:

“Any funding shortfall (ie deficit) identified by an actuarial valuation will be eliminated as quickly as the BBC can reasonably afford by payment of additional contributions over an agreed recovery period…”

When asked to comment on BBC management’s behaviour in breaking this commitment, pension scheme actuary Alison Blay said:

“I think the context of that is that in 2007 there wasn’t a deficit and so it was a fairly theoretical position”

Breathtaking, isn’t it? The BBC’s promises only count if they don’t have to be redeemed. Once the “theoretical position” becomes “reality”, the BBC simply says it never really meant it in the first place. If I behaved like that in my professional life I’d be fired. But not the morally bankrupt leaders of this organisation.

If the union wanted to, this  could form the basis for a stirring campaign against the BBC. Will they take up the opportunity?

Your last chance…

November 18, 2010

… to join the existing pension scheme. Rather surprisingly the BBC is not publicising this, but you can still join the defined benefit pension  scheme.  After December 1st, the defined benefit (DB) scheme will be closed to new members, and your only pension option will be the defined contribution (DC) scheme.

(Under the DB scheme you and the BBC pay in to the pension fund, and at the end your pension is related to how many years you’ve been in the scheme. Under the DC scheme you and the BBC pay into a different pension fund, which is invested in the market, and your returns depend on how well the fund has performed in the market.)

Regardless of how the current dispute plays out, I find it very hard to envisage circumstances where joining the DC scheme is better than the DB scheme. You’ll need to look at your personal circumstances but if you’re not in the DB scheme then I would look very seriously at getting into it NOW, whilst you still can!

UPDATE: 19th Nov

I spoke too soon. Lucy Adams has emailed everyone today about the impending closure of the DB scheme.

Strikes suspended

November 11, 2010

This afternoon the NUJ reps voted to suspend Monday and Tuesday’s strike action (subject to the BBC cancelling disciplinary action against 3 overseas union members who supported last week’s strikes). On Monday Mark Thompson said there would be no negotiations, now he is prepared to meet the NUJ – it feels like a concession of sorts.

The BBC has yet to respond. But earlier in the day Lucy Adams said that any discussions would only cover how to implement the deal, not renegotiating the terms of the deal. If that’s the case then all Mark T has agreed to is a chat, not negotiations. We’ll find out early next week: the first meeting is scheduled within a week.

Update: Mark’s email this pm makes it clear that there is no offer of negotiation on the table. I think we’re very quickly going to be back where we were – either the NUJ calls more strikes or the BBC wins hands down.