How big is the deficit?

More information seeping out, and once again the BBC is being devious.

Zarin Patel has responded (in Ariel today) to the NUJ leak. She says that it is “misleading”. Interestingly she doesn’t deny the document’s authenticity. Instead she restates that the BBC “still believes the actuarial deficit is likely to be around £1.5 billion”.

My understanding is that the reason she can say this is that there are two valuations underway; the actuarial valuation and a separate valuation being carried out by the BBC (which is being conducted by KPMG). Embarassingly for the BBC, its own valuation is the one which is coming in with a deficit of less than a billion. Why the difference? The actuary is apparently using a significantly higher prediction of future life expectancy than the BBC’s consultants. It’s a shame that the BBC doesn’t feel able to share all this information with us. Perhaps that’s because it is so damaging to their own PR.

Again, my understanding is that normally in these circumstances there would be a negotiation between the BBC and the actuary to settle on a final figure for the deficit. So we might expect it to come in at £1.2 or £1.3 billion.  If this interpretation is true then it’s a very far cry from the “probably over £2 billion” which the BBC kept repeating at the start of this fiasco. And something of a vindication for those of us who argued all along that the BBC was exaggerating the size of the deficit.

UPDATE (OCT 22ND)

Apparently the reason the BBC’s actuary is coming in with a lower deficit is because their estimate of life expectancy is based on how long BBC staff actually live in their retirement. The outside actuary is using predictions based on the general population. Sadly for us, our life expectancy comes in below the population at large, and therefore the BBC’s lower figure is more likely to be accurate. So we’re losing out twice: the BBC wants to rob us of our pensions using the wrong figures, and we’re going to die sooner anyway.

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One Response to “How big is the deficit?”

  1. BECTU’s position « Jonathan Renouf's BBC Pension Blog Says:

    […] the deficit is below £1 billion. BECTU have voted to accept that offer. The latest word is that as per my earlier post the deficit is likely to be £1.2 or £1.3 billion – far below Mark Thompson’s […]

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