The BBC are reported to be considering offering “pensions advice” to the 18,000 active members of their Pension Scheme

To most people “financial advice” means being given ” a definitive course of action” or, more simply put, “being told what to do”.

This is not what the BBC seems to be suggesting.

If the proposed changes are implemented, the BBC will provide additional help for staff to make informed decision on their pensions. Scheme members will have the opportunity for a one-to-one session with an external pension consultant to discuss all options in detail.

…says the BBC spokes (person).

Note the precise language..”help”…”informed decisions”…”opportunity”….”discuss all the options”

This suggests that the BBC are going to lead their horse to water but not make them drink. “External Pension Consultants” will be extremely wary of being seen to influence decisions, their role will be to help make informed decisions- the decision will be the member’s to make.

If I was a member I’d have three reservations

1. BIAS

If you are employed to provide members help on say – an ETV exercise, you will be employed by the sponsor of the exercise who will have clear expectations- the more liabilities you can rid of, the better.

The same goes here  for the BBC. This advice may be “free” to members but there can be no question of what the sponsor’s underlying agenda is.

BBC managers hope that the promise of free financial advice will help deflect support for a strike.

Member’s may feel they are speaking to an external pension consultant but so long as the meeting’s paid for by the BBC, I doubt they can be sure of independence.

      2. COST

“Advice” or more properly “help” is expected to cost £1m (based on someone’s estimate of the take-up of these consultancy sessions). The bet the BBC is taking is that these sessions will prove very popular (otherwise they won’t ward off a strike). If they were hour long sessions and were to be fully taken up, it looks like that they’d either be charged at £60 per hour or the bill would be considerably higher than £1m.

As the going rate for an external pension consultant is likely to be rather more than £60ph we can assume that these sessions will not be universally popular.

The true cost of a mandatory program would be many times that quoted, the actual cost of a voluntary program could be considerably less.

     3.  WORTH

I wonder whether the BBC membership really know what they are being offered. Will members be able to ask what the likely impact of the ongoing options will be relative to what they were previously promised? Will they be given a definitive course of action? If the answer to these questions is “yes” then I think the BBC have offered something of real value.

If however the answer to these questions is “no” then members may feel that what they’ve been offered is little more than they could have got from a website with some fancy modelling tools….unless they consider time spent with an “external pension consultant” valuable in another way.