Fiddling the size of the deficit

BECTU and the NUJ are both hoping to persuade the BBC to reopen the whole pensions question if the deficit turns out to be less than £1.5 billion. Quite apart from the implausibility of Mark Thompson agreeing to this, there is another reason for believing that this is not going to happen.

If you read Jeremy Peat’s Q&A in Ariel this last week (he’s the Chairman of the Pension Fund Trustees), he slips in a new point (new to me, at least). Apparently the assumptions that decide the level of the deficit – principally what’s called the discount rate – depend on the trustees’ judgement about the strength of the BBC’s commitment to the pension fund. If the trustees believe that the BBC is no longer as committed to the pension scheme as it once was, the discount rate goes down, and the deficit goes up. In other words, simply by telling the trustees that it is no longer willing to fund its commitments under the pension scheme rules, the BBC is able to increase the deficit, and so justify its decision to cut back benefits!

Even if the deficit looked like it might come in under £1.5 billion, all Mark Thompson has to do is lean on Jeremy Peat (and so far Peat has offered as much resistance as a feather in the wind) and remind him that the BBC is really not that committed to the pension scheme anymore. Down goes the discount rate (which in any case has to be signed off by the BBC), and up goes the deficit.

The more that comes out about this pensions robbery the more disgraceful it looks. We will look back on this and wonder how the BBC ever got away with such a blatant piece of thievery.

PS Tucked away in the next section of his Q&A, Jeremy Peat is good enough to confirm what I and many others have been saying for some time: namely that the BBC could reduce the deficit by giving the pension scheme rights over named assets (such as BBC Worldwide).

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3 Responses to “Fiddling the size of the deficit”

  1. Joti Brar Says:

    You’re right. Pinning a strategy on the alleged size of the deficit is asking to lose. The only way to win is to point out that whatever the size of the deficit we don’t deserve to have our wages stolen from us, and that the only way to protect them is to use our collective strength to get the BBC to back down.

    BBC management have made it clear they will do everything in their power – and tell any lies they feel necessary – in order to destroy the pension scheme. We can stop them if we’re prepared to take strong industrial action and hold out for a full victory.

    At the end of the day, WE are the BBC, not the management!

  2. Joti Brar Says:

    The other important point that the union leadership keep allowing themselves to lose sight of is that if we’re not fighting for the scheme to stay open for new joiners, we are, in effect, not fighting at all.

    Any kind of concessions or small victories we win now that doesn’t include new starters will be easily taken away in three or four years’ time. Why bother??

    We need to remember that the first principle of trade union action is STRENGTH IN UNITY!

  3. Where we’ve got to « Jonathan Renouf's BBC Pension Blog Says:

    […] that the BBC has agreed to this is because it knows the deficit will be over £1.5 billion, and as I’ve pointed out, it can effectively control the size of the deficit and ensure that this is the […]

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