The BBC is facing a £1.7billion bill as a result of handing thousands of workers including top stars and executives gold-plated pensions, it has been claimed.
The corporation has been plunged into deep financial trouble and has admitted that its staggering pensions bill is ‘not justifiable’ in documents seen by the Telegraph.
It’s understood that executives have warned that the soaring costs are negatively impacting investment in programming.
The Beeb is now even fighting a legal battle as it attempts to reduce the pension payouts and plug the black hole.
Some £1.7billion has already been put aside to fill the gap – more than the cost of BBC One and Two content last year, and around £70 each for licence fee payers.
The BBC is facing a £1.7billion bill as a result of handing thousands of workers including top stars and executives gold-plated pensions, it has been claimed. (File image)
BBC staff who joined the company before 2010 were offered retirement packages which increase in line with inflation. They also allow employees to retire at 60, six years earlier than the state pension age.
The cost of funding the gold-plated pensions is now thought to be equivalent to almost half the salaries of those employees.
The BBC has come under fire over the last two decades over whopping salaries paid to big stars and top executives. These pay packages are now hiking the cost of pensions.
The corporation’s pension scheme funds the retirement of several BBC veterans, including former director generals George Entwistle, who quit following the Jimmy Savile sex abuse scandal, and Greg Dyke, who resigned after an inquiry into the death of Dr David Kelly.
Laura Kuenssberg and Sir David Attenborough are among the top BBC stars who are eligible for the scheme, having both joined the company before 2010.
In court documents obtained by the Telegraph, the BBC’s chief operating officer Leigh Tavaziva said: ‘The sums having to be spent to continue defined benefit provision are necessarily limiting the resources available to the BBC to fund content and services, or employee reward more broadly.
‘The pension costs faced by the BBC are not justifiable in the context of its income level and the UK economic climate.’
Laura Kuenssberg (pictured) and Sir David Attenborough are among the top BBC stars who are eligible for the scheme, having both joined the company before 2010
Ms Tavaziva said the BBC ‘cannot expect the Government to require licence fee payers to pay more to cover the cost of pensions’, adding: ‘To my knowledge, the BBC is the only major media or technology organisation that has its defined benefit pension scheme open to accrual.’
The BBC last year paid 42.3 per cent of staff salary into the old scheme which was the highest level since it was set up in the 1940s and almost triple the rate in 2010.
Contributions in the civil service pension can be up to 30 per cent, while in the private sector, employers often pay in just three per cent.
Although the BBC no longer offer the lucrative pension scheme to new staff, the costs have spiralled so high that it now makes up more than 80 per cent of spending on retirement benefits, despite affecting fewer than 40 per cent of staff.
The BBC is in the midst of a legal battle to try and reduce the costs of the scheme and has appealed against a ruling by the High Court which blocked it from reinterpreting the benefits of 6,800 workers still saving into it.
In September, the BBC was granted permission to appeal and its understood a hearing will take place next year.
It comes as the BBC faces a government review over the future of the licence fee amid warnings the model was not sustainable.
The BBC plans to pay a total of £1.7billion from March 2022 to the end of 2028. Licence fee payers have to contribute millions each year to the BBC’s ‘deficit payment plan’ to help fix the gap between the pension scheme’s assets and libailities.
Conservative MP Jacob Rees-Mogg said: ‘The liabilities that taxpayers face from gold-plated pension schemes is vast even if ameliorated by the recent rise in interest rates.’
A spokesman for the BBC said: ‘Like many organisations, the BBC is reviewing its pension options in the interests of both its staff and licence fee payers.
‘We are committed to providing an industry-leading offer for all employees that is financially stable, fairer and more consistent whilst balancing this with the need to deliver value.’