Summary Report

with news from the Trustees 2019

Welcometo our summary report, which gives you the highlights from the BBC Pension Scheme (the Scheme).

I feel very privileged to be writing to you as the new Chair of Trustees, having taken over the reins from Bill Matthews when he stepped down at the end of 2018. There are now three Independent Trustees on the Trustee Board - Kevin Carter, Eileen Haughey and I - working alongside the eight Trustees appointed by the BBC and Scheme members.

As a newcomer to the BBC Pension Scheme, there are many things about it that have impressed me - not least its top-calibre team of executives and advisers.

The in-house investment team has delivered excellent investment returns, as described in more detail on page 5, while the administration team gets consistently positive feedback on its service level to members. I am also impressed with the member communications in general and

the focus in providing you with a high-quality, user-friendly member self-service website. In my view, myPension Online is leading the way in providing a quality service to our members.

Looking ahead, we are now in a valuation year. The Scheme must have a full valuation every three years and this one examines the funding position as it stood on 1 April 2019. This is a large and complex project and one which will take up a lot of the Trustees’ time over the next 12-18 months. We will let you know the results in due course.

Catherine ClaydonChair of the Trustee Board

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Catherine Claydon Chair of Trustees

At a glance·The Scheme provides

benefits to 48,478 members.

·The market value of the Scheme’s assets rose by £0.7bn in the last financial year.

·The 2018 funding level was 94% (2017: 91%).

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Changes to the Trustee BoardLast year’s summary report set out the new structure of BBC Pension Trust Ltd, the not-for-profit Trustee company that is responsible for looking after the Scheme in the best interests of all its members.

Since 1 January 2019, the Trustee company is managed by three independent Trustees, four BBC-appointed Trustees, and four Trustees who are elected by the Scheme’s membership.

Your pensioner-nominated Trustee Leslie Huss-Smickler’s term of office ends in December 2019. Interested pensioner members were invited to a briefing session in May, to find out more about this rewarding and interesting role. Eight former contributing members put themselves up for the role, and Leslie Huss-Smickler was re-elected.

Anna Mallett left the BBC in February and was replaced on the Board by Glyn Isherwood. Glyn is the BBC’s Chief Financial Officer. Peter Johnston replaced Anne Bulford as a BBC Trustee in April, following Anne’s departure from the BBC. Peter is Director, Northern Ireland. Eileen Haughey joined the Board on 1 January 2019 as an independent Trustee.

Introducing the Money and Pensions ServiceThe Money and Pensions Service is a new organisation set up by the Government. It brings together the Money Advice Service (MAS), The Pensions Advisory Service (TPAS) and Pension Wise into one single organisation. Its mission is to ensure that all UK citizens can easily access the information they need to make the right financial decisions throughout their lives.

For the time being MAS, TPAS and Pension Wise are still using their current names on their websites and social media profiles. You can find out more at moneyandpensionsservice.org.uk.

Trustee News

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The 2016 full valuation report and 2017 and 2018 funding updates are available at: bbc.co.uk/mypension.

2019 funding updateThe 2019 valuation is currently underway, so this year’s summary report does not include an update on the funding position of the Scheme. The Trustees, the BBC and the Scheme Actuary will agree the assumptions that will be used to calculate the Scheme’s funding position. This is a very important first step in the process, because it enables the Actuary to calculate how much the Scheme needs to set aside now to pay pensions in the future.

The Pensions Regulator allows 15 months to complete this complex task, and we will report back to you in due course once it has been completed.

Trustee News Pension scamsIf you have a pension that is not yet in payment you may be able to transfer it to another pension arrangement, but you should be wary of pension scams. Scammers can be articulate, financially knowledgeable and often have credible looking websites, testimonials and materials that are hard to distinguish from the real thing.

Look out for the warning signs, including being contacted out of the blue, promises of high/guaranteed returns, free pension reviews, access to your pension before age 55 or the pressure to act quickly.

Learn how to spot the signs and check who you’re dealing with at fca.org.uk/scamsmart.

How we use your dataYou can find out how the Trustees use and look after your data by reading the Scheme’s Privacy Notice at: bbc.co.uk/mypension.

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Finances

The full Report and Accounts are available at: bbc.co.uk/mypension.

Investments at a glance

• The Scheme’s return of 6.3% was ahead of its benchmark return of 5.3% in 2018/19, helped largely by the good performance of the Scheme’s return-seeking assets and also a decline in the value of the Pound.

• The Scheme’s investment return over the past 5 years is 11.6% p.a.

• Since 1978 the Scheme’s investments have generated a return of over 11% p.a.

The Scheme invests in a wide range of long-term assets, such as equities, bonds, property and a range of alternative assets (private equity, infrastructure, etc). The Scheme invests in many well-known companies e.g. Amazon as well as some you may not have heard about (yet). Among its top (by value) direct investments are:

· Illumina Inc (£44.2m) … a life sciences company that is leading the way in genomics – an industry at the intersection of biology and technology – to transform human health.

· Alphabet Inc (£41.9m) … the parent company of Google.

· Tencent Holdings Ltd (£40.8m) … a Chinese multinational that aims to ‘enhance the quality of human life through Internet services’.

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Finances

Opening net assets of the Scheme at 1 April 2018 £16.6bn

Total income 0.5bn

Total expenditure (0.5bn)

Change in market value of investments 0.7bn

Closing net assets of the Scheme at 31 March 2019 £17.3bn

Accounts summary

Value of the Scheme

2014 2015 2016 2017 2018 2019

£17.3bn

£16.6bn£15.8bn

£12.9bn£12.9bn£10.8bn

Green investment

The Trustees review the Scheme’s main risks – including from climate change – at regular meetings. The Scheme has made a number of infrastructure and renewable energy investments where these have been compatible with the Scheme’s financial objectives. You can read the Scheme’s full Responsible Investment Policy on the website bbc.co.uk/mypension.

The full Report and Accounts are available at: bbc.co.uk/mypension.

The figures shown on this page include members’ Additional Voluntary Contributions.

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Scheme NoticeboardSuccess of online campaignThe Trustees’ campaign last year to promote myPension online through a range of targeted communications proved to be highly effective.

The campaign increased the number of registered members from 4,000 to 13,500 within the first 6 weeks, and by April 2019 there were 17,000 users. Since the summer, over 5,000 members have used the website to update their contact details, 7,700 have reviewed their expression of wishes, and over 62,000 calculations have been run online. These sorts of results mean that staff in the Pension and Benefits Centre have more time to provide a one-to-one service to those people who need it, so this is a clear win for both the Scheme and its members.

To register you will need your personal security number, which you can get by emailing your National Insurance number to myPension@bbc.co.uk.

Once registered you’ll only be a couple of clicks away from accessing the following:

• Active and deferred members can view their latest benefit statement and also run benefit and transfer value calculations.

• Pensioners can view their payslips, P60s and pension increase information.

• Update your address and contact details.

• Change the nominated dependants for your pension benefits.

Login or register here: bbc.co.uk/mypension.

PENSION SCHEME

Answering your questionsIf you have a question about the Scheme or your pension, please call the pension service line.

The pension service line is open between 8:30 and 17:00, Monday to Friday, on: 029 2032 2811.

Contact us through myPension online or email: myPension@bbc.co.uk.

Please quote your staff number, pension number or National Insurance number so we can identify you.

Before you contact us though, do remember that there is plenty of information about the Scheme at: bbc.co.uk/mypension.

Pensioners’ Liaison Meeting We won’t be holding the PLM this year. Instead we’re looking at the possibility of running several ‘regional’ PLMs in future, in addition to the London-based event.

We will notify you of the dates and locations in due course, where you will have a chance to put questions to members of the pensions executive and a Scheme Trustee.

We’re movingAfter 27 years the team will be moving later this year into BBC Wales’ new flagship headquarters, Central Square. Whilst the move is a significant task, there should be no impact to the high levels of service Scheme members have come to expect from the Pension team.

We’ll be in touch with our new contact details in due course.

Artist’s impression of Central Square (Cardiff)

Help and Support

8 Produced by Pension and Benefits Centre - August 2019