BBC Case - Clarifies That Agreements With Members Can Override Scheme Rules

The High Court recently looked at whether future accrual under the DB section of the BBC Pension Scheme could be limited by reference to capping pensionable salary increases at 1% via agreement or whether the scheme rules themselves allowed capping without requirement for amendment.

The BBC had sought to address the deficit in its DB scheme by giving members the following options:

• remaining in the scheme but having future pay increases limited for pension purposes to 1%;
• opting out of the DB Scheme and joining a career average scheme without a cap applying; or
• leaving the DB Scheme and joining a defined contribution scheme.

The BBC argued that that they had an implied ability to cap salary through the definitions, as "Basic Salary" was defined as "the amount determined by the BBC as being an employee's basic salary or wages payable under the terms of his or her continuing or fixed term contract". The judge rejected this argument on the basis that, as