BBC reports wider pension deficit

Vows to make major changes in deals with staff

LONDON -- The BBC revealed Tuesday that its pension deficit had widened to £2 billion ($3 billion) -- more than half its annual £3.5 billion ($5.3 billion) income – and said it would have to make major changes to the terms of its pension deals with staff in a bid to address the enormous shortfall.

The pubcaster's CFO Zarin Patel said that the proposals would make the BBC the first public sector company to reform its pension arrangements in the U.K., and expects other government-run organizations to follow suit.

But leading broadcast union Bectu warned that pension cuts could lead to strike action.

Among the changes proposed include closing the BBC's final salary pension scheme and capping the pensionable entitlement of existing members of the scheme from next April.

"Future salary increases for calculating pension benefits will be limited to 1% per annum. In other words, after this date pensionable salary will grow at a maximum of 1% per year, no matter what actual salary increases an employee receives," the finance head said to staff in an email.

The BBC will consult on the proposals and finalize its decision by the end of the year.