BBC in High Court over pension scheme reforms

The BBC Pension Scheme has been taken to the High Court over changes to member benefits it made last year.

A BBC employee has taken the corporation to the High Court claiming last year's cap on future pensionable salary increases at 1% is illegal.

In a deal in 2010, the broadcaster offered members a chance to join a new career average section called CAB 2011, join its defined contribution scheme LifePlan or remain in the old section with a 1% cap on future pensionable salary increases.

The employee, who is a clarinettist in the BBC Philharmonic Orchestra, appealed to the Pension Ombudsman over the reform last year.

The member said the BBC failed to reference limiting increases in basic pay for pension purposes to 1% to its scheme trustees, and that this contravenes Section 91 of the Pensions Act 1995 which prohibits agreements seeking to reduce pension benefits.

They also said the 1% cap on the final salary scheme was an unfair attempt to drive members out of the scheme.

In October the Ombudsman ruled against the claimant, who will now appeal the decision at the High Court.

A decision on the case by is expected within weeks and could have implications for the changes made to the BBC Pension Scheme last year in a bid to cut a £2bn deficit from the scheme.

The BBC said the claimant had no right to an increase in salary and an agreement to increase the salary on terms that part of that salary is pensionable would not contravene Section 91.

Legal experts were doubtful the s91 argument would succeed.

LinkLaters partner Mark Blyth said: "If a member has no contractual right to an increase in basic salary, I do not think there is any good argument that members have a right or entitlement to pensionable pay with reference to future salary increases.

"If there's no right to future increases, there is no entitlement under which Section 91 bites."

The BBC declined to comment.