The newspaper for BBC pensioners – with highlights from Ariel online Broadcasting House hosts 2015 PLM Page 2 Dec 2015 • Issue 6 Memories Pensions PIE Memories at Ariel explained of ‘66 Flying Club Page 3 Page 4 Page 6 NEWS • MEMORIES • CLASSIFIEDS • YOUR LETTERS • OBITUARIES • CROSPERO 02 BBC PENSIONS 2015 Pensioners’ Liaison Meeting The 2015 Pensioners’ Liaison ‘Running the BBC Pension Scheme – Historically low bond yields ‘The aim of the plan is to provide recovery with assets of between £12-£13 billion, in event of a real disaster. We held a rehearsal The two key markets the Scheme is interested Meeting was held at the Radio depending on what the markets are doing in mid-September at Wood Norton, where in are equity markets and government bonds. – is like running a huge financial business. I the scenario was a complete closure of the Theatre in Broadcasting House, Equity markets have performed very strongly believe the Scheme is in good hands, and the building in Cardiff and all systems lost. We since the trough in 2009, with a bit of a dip London on 22 October. job I do is made a whole lot easier thanks to went to Evesham and managed to get the down over the last few months. On long-term Joy Moore and her team.’ system back up and operational – it was a government bonds (Gilts), however, the yield Bill paid tribute to Joy, who will be leaving complete success.’ has come down to historically low levels. the Scheme next year. ‘This will be Joy’s last The Trustee team had asked James Hacker Looking at the Scheme’s longer-term meeting of this nature. I can’t believe we to join them to give an overview to the numbers, in 1995 the value of the Scheme didn’t have a CEO before now – and now I meeting on the recent Pension Increase was £3.9bn; in 2005 it was £6.4bn and at can’t imagine that we could do without one.’ Exchange (PIE) option sent out by the BBC. the end of March 2015 it was £12.9bn. Joy (the BBC Pension Scheme CEO) then James looks after pension policy on behalf of ‘In other words, the assets have almost took over from Bill to provide a recap of the BBC, as the Scheme sponsor. (An article doubled every ten tears,’ said James. the Scheme’s funding position and to look about PIE appears on page 3.) In investment performance terms, the rate ahead to the 2016 valuation. ‘The annual Thereafter followed a lively Q&A session, of return over the last year (2014/15) was summary report was sent in August, and for where the panel asked a variety of questions about 20%. ‘That might seem like a really those of you who’ve read it, the good news about investments, pension increases, good number, but if you look at the measure is that when we did the annual interim check PIE and the BBC’s ongoing support for his year’s event was attended by 71 of how fast our liabilities are going up, over at 1 April 15, the funding level had improved the Scheme. BBC pensioners, who listened to a last year our liabilities went up by even more just a little bit – it was showing 88% funded, variety of speakers giving an insight than the assets.’ with assets of £12.9bn and liabilities of into what is involved in running The pensioners attending the meeting next £14.6bn.’ Ta multi-billion pound pension scheme like heard from Leslie Huss-Smickler, a former the BBC Pension Scheme. Bill Matthews, the Valuation BBC pensions manager who is now the Jargon buster chair of the BBC Pension Trustee Limited, pensioner-nominated Trustee for the Scheme. A bond is basically a fixed-term loan to opened the meeting. He joined the BBC Trust Work on the formal valuation of the pension Leslie has worked in the pensions industry scheme will start around Christmas-time and a company or the Government (called a as the member for Scotland in January 2011. for about 45 years. He left the BBC in 1994 to ‘Gilt’), where there is an agreement that Born in Scotland, he currently lives just continue right through into the summer. Joy join BT and stayed there for 17 years. In 2012, said, ‘At this time next year, the valuation you will receive regular interest payments outside Glasgow. ‘I consider myself a fierce he decided to semi-retire and now works (called ‘the yield’) and the principal amount Glaswegian, and if anyone wants to talk will be very progressed but it is unlikely it part-time as head of retirement services for a will have been completed.’ back at the end of the agreed period. about rugby I’ll leave the room,’ he said, company called WEALTH at work, providing The yield of a bond is inverse to its to much laughter. An engineer by training, The key message she wanted to leave the financial education in the workplace. meeting was that the Scheme was on track price; as bond prices increase the yield Bill spent over 20 years in the private sector Leslie was elected earlier this year as a will fall. So, if you pay £1,000 for a Gilt in marketing and operations roles for large against the deficit repair plan that was agreed BBC Trustee and gave a brief overview of in 2013: ‘We are where we expected to be so that pays a 3% yield, you would receive and small companies in the electronics the Trustee Board and the steps they take to I think that is a positive message with which an annual interest payment of £30. If the market, mostly based in Scotland. Based manage risks. to end my session.’ value of your Gilt increases to say £1,200, on his experience, he was offered several ‘There are nine Trustees. The chairman is James Duberley was next on stage to talk that £30 is proportionately now worth only non-executive director roles and has worked appointed by the BBC Trust, four are about the BBC Pension Scheme’s investments. 2.5% of the investment – so, the yield across the public and private sectors, and of appointed by the BBC, three are nominated James is responsible for a small team that has fallen. course for the BBC Trust. looks after the Scheme’s investments and by the active members of the Scheme and Pension schemes like to buy Gilts makes recommendations on strategy and one Trustee is nominated by the pensioners because they provide a steady, guaranteed Huge fan investment changes to the Trustees. – that’s me. flow of income over a very long period. So, ‘I’m enjoying life as a national Trustee for The team has a deep pool of expertise and ‘Being a Trustee is no simple job. It’s there is high demand for Gilts, especially Scotland - it’s a lot more interesting than uses a wide range of advisers and external demanding but the work is very interesting as pensions are more regulated now I thought it was going to be,’ he said. assets managers who are specialists in and varied.’ and schemes have to show they are not He described himself as a fan of the different areas of the market to look after Leslie was followed by Ian Cutter, Head taking undue risks with their assets. More BBC and a huge supporter of public service the Scheme’s investments. of Pension Shared Services, who continued demand means the price of Gilts goes up broadcasting. ‘I remember watching the ‘The way we look after the investments with the topic of risk: ‘One of the risks faced – and as a result the yield goes down. Morecambe and Wise Christmas shows goes hand-in-hand with the funding of by the Pension and Benefits Centre in Cardiff Also, because pension schemes with my father – I think he would be the Scheme,’ he explained. ‘The Scheme’s is that something happens that means we are required to calculate their future quite impressed that I am standing here primary objective is to pay benefits and to are not able to operate as usual. To mitigate liabilities by modelling them on Gilt yields, in the BBC.’ achieve that, there is an interim objective of this risk, we have a business continuity plan, when yields go down, the current value The four-year period since he joined the being being fully funded on a self-sufficiency which we test regularly to ensure that should of the pension scheme’s liabilities goes pension scheme has been an interesting time basis by 2026 – where the Scheme has no the pensions system be unavailable for any up – which has a negative effect on in the world of pensions, with ‘more change need for any support from the BBC. That’s the reason, we are still able to operate and pay scheme funding. than we’ve seen for many years’. point we’re hoping to get to.’ your pensions. 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