UK - The BBC’s director general Mark Thompson yesterday admitted that there was ‘anxiety and anger’ over proposed changes to the broadcaster’s pension scheme.

It was revealed in late June that the public service broadcaster would close its £8.23bn (€10.16bn) defined benefit scheme to new members in an effort to combat a deficit of £2bn; up significantly from £470m in 2008. Thompson has defended the move, saying the closure was not because the scheme had been badly run.

In an email to staff published by a UK newspaper, Thompson said an ongoing consultation was genuine and he was listening to employees’ concerns.

He added: “The economic realities that led us to make the proposals have to be confronted - not just the current deficit which is between £1.5bn and £2bn, but the longer term pressures which the BBC pension scheme faces.”

Further, the director general said that pension payments made to senior management would be examined during the review.

Broadcast union Bectu is considering strike action during the last night of the Proms if the dispute is not settled.

In other news, construction company Interserve yesterday revealed that its pension deficit had increased to almost £76m, blaming changes in the markets.

Compared to the end of last year, the scheme deficit was up 9.5%, from £69m in December. This was “principally [due] to lower than expected asset returns in the first half”, the company said.

It added: “Following the range of actions taken last year to improve significantly the funding position and reduce future volatility we believe that we now have a robust and affordable funding plan to address the remaining shortfall over the next seven years without restricting our ability to support our growth ambitions.”

Finally, Chris Iggo, chief investment officer of Axa Investment Managers said he believed UK gilts were overvalued when examining UK inflationary figures.

Iggo said: “As gilt yields hit approach 3% at the 10-year maturity and inflation (CPI) remains above 3% the prospective real return from the gilt market is extremely low.”

He said factors such as the current government’s plans for fiscal consolidation, as well as concern about a double dip recession in the US had driven yields down.

“These may well be good reasons why investors have bought gilts but set against the medium term macro backdrop it appears that further sustainable declines in gilt yields look unlikely,” Iggo added.
 

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