Why the rush?

So, the BBC’s top brass have been listening to our concerns, and this week’s Ariel sees a concerted effort to try and fight back against the avalanche of criticism their proposals have generated.

One glaring, obvious question remains unanswered. Why are we being rushed into a decision now? In the FAQ’s the explanation for the BBC’s timing was this:

“The Scheme Trustees are required by law to carry out an actuarial valuation at least every three years to work out how much the BBC has to pay to the scheme, and that was last done on 1st April 2007. The current valuation started on 1st April 2010 and must be completed within 15 months. Following the outcome, the Trustees and the BBC must agree the contributions to pay for future benefits and reduce the deficit.”

“Following the outcome…” it’s a resonant phrase. After the actuarial valuation is complete, the BBC must take action. Not before. Not whilst the actuarial valuation is underway. Following its completion… So there appears to be no compelling legal reason why we have to agree a plan to close the deficit way in advance of the actuarial valuation being completed. Furthermore, it seems to me entirely justifiable and fair to wait for the independent valuation of the deficit before throwing away tens of thousands of pounds in future benefits.

So why are we being railroaded into a deficit reduction plan right now? Because if the BBC is forced to wait until the next actuarial valuation two things will have happened. First, it will in all likelihood be clear that the pension fund situation is not as bad as they are making out, which will bring into play a whole series of alternative options which will muddy the simple message the BBC is trying to sell. Second, and I think infinitely more importantly, the BBC’s ability to act unilaterally will be significantly reduced. Let’s look at that quote from the FAQ again: Following the outcome the Trustees and the BBC must agree the contributions to pay for future benefits and reduce the deficit. In other words, at that point the responsibility to close the deficit falls back on the BBC, and they have to bring the Trustees into play. So it becomes a negotiation and what’s more a negotiation where the BBC is heavily disadvantaged because they have legal obligations to close the deficit. It becomes all about the BBC working out how much it has to pay into the scheme to plug the deficit.

This is hugely significant. If you’ve read an excellent letter from Ian Pollock in Ariel this week, you’ll have seen that currently the BBC is effectively dealing with the pensions deficit as a salary issue, bypassing the pension scheme trustees. Jan Killick (head of pensions) says: “[the proposed limit on pensionable salary] will be introduced through the pay review process… It is not being implemented through the Scheme rules.” Because the rules of the pension scheme are written so tightly to protect the benefits of members, this is the only way that management can massively reduce the BBC’s exposure. Waiting for the results of the valuation undermine this strategy.

So to summarise: I would love to see Mark Thompson answer the question: Why can’t we wait until until the valuation is complete before deciding what action to take? I feel another letter to Ariel coming on…

If we fall for this one we’ll spend the next 20 years wondering how we allowed ourselves to be mugged so easily.

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