BBC to close final salary pension scheme to new employees

Cuts aimed at reducing corporation's £2 billion deficit.

The BBC is likely to close its final salary pension scheme - which guarantees staff a minimum pay-out on retirement - to new employees from December. The corporation has also proposed a cap on its contributions to existing employees from April 2011.

In an email to staff, Lucy Adams, director of BBC People, and Zarin Patel, BBC's chief financial officer, wrote that irrespective of salary increases, the pensionable salary will grow at a maximum of one per cent per year. They said poor performance of the stock market had prompted the decision.

The BBC employees can however move their pension fund to a new defined contribution scheme, which does not give members a definite amount each year.

The proposals are part of the corporation's efforts to tackle a £2bn deficit. The broadcasting unions are opposing the proposals. Bectu, the union which represents thousands of BBC staff, may consider industrial action.

The BBC will consult on the proposals until 30 September.