The BBC has been forced to double its contributions to its pension scheme after the triennial review revealed a sharp rise in the deficit.
The BBC Pension Scheme, which has around 59,000 members including 22,000 pensioners, saw its deficit increase by £900m (€1.1bn) from 2010, hitting £2bn.
The results of its 2013 triennial valuation now estimate its liabilities at £12.3bn, up by £3bn, compared with assets of £10.3bn, which also rose by £2.1bn.
As a result, the schedule of contributions from the UK broadcaster to its pension scheme has now been ramped up.
The body, which is partly funded by a public TV-license fee, will now contribute £740m over the next four years, compared with the previous schedule of £375m.
The schedule agreed at the 2010 triennial review would have seen the BBC contribute £675m between 2014 and 2021, but this will now rise to £1.2bn.
By 2026, the end of the new schedule, the organisation will have contributed £1.96bn, aiming to remove the deficit completely.
Despite the higher than expected return on the scheme’s assets, the trustees said market conditions were to blame.
The fall in UK government bond yields since 2010 resulted in a £1.6bn addition to the deficit.
Bill Matthews, chair of the trustees, said the scheme also agreed to add two years to its funding plan to reach self-sufficiency.
He also said the trustees shifted the firm’s investment portfolio to provide greater certainty on returns and complement the scheme’s growing pensioner population.
Since 2010, the scheme has reduced its equity holding by 18 percentage points, as it now accounts for 38% of holdings. This was in reaction to the increase in the number of pensioners by 3,800.
Bonds now account for 31% of investments, compared with 22% in 2010, while the scheme has actively increased its allocation to alternatives, rising to 17% from 9%.
The scheme was also only 53.1% funded on a buyout basis, with an additional £9.1bn required from the BBC to cover this.
However, the trustees stressed the scheme had no plans to enter this arrangement.
“Throughout the process, the trustees were conscious of the need to strike a balance that was both appropriate for members and did not undermine the BBC’s ability to support the scheme,” Matthews said.
“I must stress that the scheme will continue to pay out benefits in line with its rules.”
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