Â鶹¹ÙÍøÊ×Ò³Èë¿Ú

3a. Persons employed

The average number of persons employed (full-time equivalent) in the year was:

Within the averages above, 154 (2008: 160) part-time employees have been included at their full-time equivalent of 83 (2008: 85) and 40 (2008: 39) persons on guaranteed minimum contracts have been included at their full-time equivalent of 13 (2008: 11). In addition to this, Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service employed an average of 49 persons on a casual basis (2008: 47). Their payroll costs are included in note 3b.

3b. Staff costs

A salary sacrifice arrangement was introduced on 1 June 2008 for Old and New Benefit pension scheme members. The contributions paid via the salary sacrifice arrangement have been treated as employer contributions, and a reduction in salary.

The funding arrangements for Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service incorporate efficiency savings targets. Generating savings and the consequent levels of redundancy and restructuring costs therefore represent an ongoing business activity for Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service.

3c. Pensions

Many Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service employees are members of the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú’s pension schemes: the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú Pension Scheme (a defined benefit scheme) and the Group Personal Pension Scheme (a defined contribution scheme).

Â鶹¹ÙÍøÊ×Ò³Èë¿Ú Pension Scheme

The Â鶹¹ÙÍøÊ×Ò³Èë¿Ú Pension Scheme provides salary-related pension benefits on a defined benefit basis from assets held in separate, trustee-administered funds.

The scheme is subject to independent valuation by a professionally qualified actuary at least every three years, on the basis of which the actuary certifies the rate of employer’s contributions. These, together with the specified contributions payable by employees and proceeds from the scheme’s assets, are expected to be sufficient to fund the benefits payable under the scheme.

The most recent full actuarial valuation of the scheme was prepared as at 1 April 2007 by Watson Wyatt, consulting actuaries.

At 1 April 2007, the actuarial value of the assets was sufficient to cover 103% of the benefits due to members, after allowing for expected future increases in earnings.

As a result of the 2007 actuarial valuation by Watson Wyatt, it has been agreed between the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú and the pension scheme trustees that:

• the employer contributions will decrease from 19.35% to 18.6% from 1 April 2009 and to 17.85% from 1 April 2010;
• the employee contributions will rise from 6% to 6.75% from 1 April 2009 and to 7.5% from 1 April 2010; and,
• the additional payments previously agreed as a result of the 1 April 2005 valuation are no longer required.

The next formal actuarial valuation is expected to be performed as at 1 April 2010 and the trustees will obtain actuarial reports in the intervening years.

Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service, following the provisions within FRS 17: Retirement Benefits, accounts for the scheme as if it were a defined contribution scheme. This is because it is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis.

The pension cost for this scheme therefore represents contributions payable by Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service to the scheme and the costs amounted to £10.6 million in the year (2008: £9.4 million).

In addition, contributions of £1.5 million which were prepaid in the year ended 31 March 2007 for the financial year 2008/09 were refunded as the additional payment was no longer required, bringing the total contributions in the year to £9.1 million. No additional payments were made in the year to 31 March 2009.

The actuarial valuation was updated for FRS 17 purposes to 31 March 2009 by Watson Wyatt, consulting actuaries. This valuation identified a deficit of £138.6 million in the scheme at 31 March 2009 (2008: surplus of £528.4 million).

Additional disclosure about the scheme and its financial position under FRS 17 is provided in the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú Annual Report and Accounts that can be found at .

Group personal pension scheme and other schemes

The Â鶹¹ÙÍøÊ×Ò³Èë¿Ú also operates its own defined contribution pension schemes, including those operated in the USA and Australia. The pension cost represents contributions payable by Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service to the funds and this amounted to £0.1 million in the year (2008: £0.1 million).

3d. Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service Board remuneration

The members of the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service Board who served during the year are detailed .

3d(i). Remuneration policy

The remuneration package for the Director, Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service is set by the Director, Â鶹¹ÙÍøÊ×Ò³Èë¿Ú Global News, and approved by the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú Director-General and the Director, Â鶹¹ÙÍøÊ×Ò³Èë¿Ú People.

The Director, Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service assesses the performance of the Board members before recommending their annual remuneration and bonus awards. Their remuneration is approved by the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú Director-General and the Director, Â鶹¹ÙÍøÊ×Ò³Èë¿Ú People.

The Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service’s Head of Human Resources provides technical support in this respect, but has no input into decisions affecting his own remuneration.

The Â鶹¹ÙÍøÊ×Ò³Èë¿Ú aims to ensure that the packages offered to Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service Board members:

• enable Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service to attract, retain and motivate high-calibre executives;
• remunerate individuals fairly for individual responsibility and contribution, while providing an element of performance-related pay, reflecting the underlying performance of Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service; and,
• take into account salary policy within the rest of the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú and the relationship that should exist between the remuneration of Board members and that of other employees.

The remuneration arrangements for the members of the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service Board include the following components:

Base pay
Base pay is reviewed in August each year, taking into account external market levels and internal comparisons as well as the individual’s responsibilities and performance.

Annual bonus
The Â鶹¹ÙÍøÊ×Ò³Èë¿Ú has taken the decision not to award any bonuses relating to the 2008/09 financial year. The entitlement to an annual bonus remains for future years and members of the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service Board will be eligible to receive a bonus of up to 10% of base pay for meeting certain performance targets in future years. Qualitative and quantitative objectives are set at the beginning of the financial year, and performance is reviewed at the end of the year. The annual bonus scheme recognises the importance of maintaining a balance between base pay and providing an element that reflects individual performance and contribution.

Benefits
In addition to salary and bonus, the main contractual benefits provided to members of the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service Board are a car allowance, private health insurance, pension and life assurance. Some Board members are also entitled to a car fuel allowance.

Pensions
Members of the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service Board are eligible to participate in the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú Pension Scheme, which generally provides salary-related pension benefits on a defined benefit basis. For any employee joining on or before 1 November 2006 the accrual rate is 1/60th of final salary per year of service, subject to the HM Revenue & Customs earnings cap where appropriate. Normal retirement age is 60. For members of the Board who joined after this date, the accrual is 1.67% of their average base pay adjusted in line with price inflation, with a normal pensionable age of 65. Only base pay is pensionable and does not include any bonuses or other payments. The scheme provides for early retirement on medical grounds and life assurance cover of four times base pay up to a prescribed limit.

3d(ii). Remuneration in the year

The remuneration of the permanently appointed members of the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service Board is set out below. As several of the Board members have responsibilities across Â鶹¹ÙÍøÊ×Ò³Èë¿Ú Global News these remuneration totals contain only those costs borne by Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service.

Remuneration costs are allocated in proportion to the amount of time spent on Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service matters. The proportion of the role to be allocated to Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service is assessed separately for each Board member. These allocations are assessed on an ongoing basis.

A salary sacrifice arrangement was introduced on 1 June 2008 for Old and New Benefit pension scheme members. The contributions paid via the salary sacrifice arrangement have been treated as employer contributions, and a reduction in salary.

The highest paid member of the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service Board in the year was Nigel Chapman, Director, Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service. The aggregate of his emoluments to 31 March 2009 was £239,300 (2008: £228,000). As a member of the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú Pension Scheme, his total accrued annual pension at 31 March 2009 was £106,087 (2008: £98,000).

All 13 of the full-time members of the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service Board have retirement benefits accruing under the Â鶹¹ÙÍøÊ×Ò³Èë¿Ú Pension Scheme (2008: 13 members).

The table below gives additional disclosure on Â鶹¹ÙÍøÊ×Ò³Èë¿Ú World Service Board remuneration, analysing the number of Board members within bands of £10,000. The totals represent the annualised ongoing salary costs of the Board structure at the date of publication of this Annual Review.

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