Today I am laying before Parliament a Departmental Minute describing a liability that the Department for Digital, Culture, Media and Sport intends to take on in relation to the British Tourist Authority (BTA) pension scheme.
The BTA, currently trading as VisitEngland and VisitBritain, has operated a defined benefit pension scheme for the benefit of its employees since it was created by the Development of Tourism Act 1969.
To ensure a strong covenant rating and avoid a substantial increase in the BTA’s annual contributions to service the scheme, the Government has decided to issue a Guarantee to cover the shortfall between the scheme’s assets and its liabilities should the BTA close down. The shortfall is currently estimated at £125m in today’s prices though is likely to decrease with time due to further BTA contributions to service the scheme, pension fund investment returns and scheme members passing away. Importantly, the Guarantee will also allow the BTA Board to ratify the cessation of defined benefit accrual and to agree a move to a defined contribution scheme.
The BTA was created by an Act of Parliament, and only another Act can close it down. I would like to reassure the House that the Government has no intention of bringing forward a Bill that would actually trigger this Guarantee. As our national tourist board, the BTA undertakes invaluable work promoting the whole of the UK as a tourist destination and thus the likelihood of the liability crystallising is extremely low.