Mark Thompson’s letter

I haven’t had much time to look at Mark’s pension letter today, but at first reading there’s a positive and a negative. The positive is that the tone is conciliatory, and he has understood exactly what it is we don’t like about his plans. The negative is that behind the velvet glove there’s still a pretty iron fist. He is still absolutely determined to ram through changes before the valuation is complete. And it looks very much as if his solution to the concerns he acknowledges is going to be create a “3rd option” (the two existing options being to stay in the fund and have your pensionable salary capped at 1% pa, or to leave the existing scheme and join the DC scheme). If I’m right this third option will offer a low risk (but also I suspect low return) scheme, which will guarantee inflation proofing of existing accruals (as the DC option currently does) whilst offering a more stable promise of future returns. From Mark’s point of view the creation of a 3rd option has the inestimable advantage that it will preserve his main aim which is to get as many people off the existing scheme as possible (see my last post).

Is anyone else reading it differently?

For myself I think that we shouldn’t give up on the existing scheme so easily. The legality of the brutal attack on our benefits needs to be tested – I think another reason for the more emollient language is that an improved offer – albeit one that still destroys the existing scheme – might mean he can avoid a drawn out and potentially dangerous legal battle. Not to speak of strikes.

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2 Responses to “Mark Thompson’s letter”

  1. Chris Says:

    Of course, a 4th option might be to close the scheme forthwith to everyone, “just like that”, and take on the unions. From the point of view of the bigger picture of safeguarding the licence fee at anything like current levels, MT might think this is a battle her has to win – your point about ‘outliers’, a weasel word if ever there was one, being spot on, I think.

    To be fair, I’ve not seen any hint of that – yet, thougn the threat to do so is surely implicit. What would that do to accrued funds to date and going forward? Not a lot, I would think. However, I guess the effect could be sweetened by underwriting the current deficit in some creative way, as has already been discussed.

    Another interesting issue is whether there is a plan to switch current (and future) pensioners from RPI-based increases to CPI, as pushed by the new government (also on dubious legal grounds, it seems)

    Chris

  2. renouj21 Says:

    I agree there is a bigger risk here, which is that the BBC might simply close the scheme and as you say “take on the unions”. But given the votes for strike action that the proposals have produced, one hopes that he would have pause for thought before going to war.

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