Update

Well, it’s been a very long time since I updated this blog, but suddenly there is loads to write about.

First things first: the BBC is trying to dragoon everyone into making a quick decision about your pension options (stay in the current scheme, CAB 2011, or the new defined contribution scheme). However, there is no need to make any decision until the end of 2011. And by far the most sensible thing to do is sit and wait, for lots of reasons. First, the final details of CAB2011 have yet to be published. Second, it is by no means clear that the fight against the BBC’s proposals is over. The NUJ is getting an independent valuation of the deficit (which the BBC declared was £1.6 billion). As I predicted, this was just over the £1.5 billion figure that would have triggered a re-opening of negotiations between the unions and the BBC, but there are many questionable assumptions within the valuation that the union may well challenge. And according to Broadcast this week, there are also potential legal challenges to the BBC’s strategy in the offing.

In the circumstances, waiting until the end of the year is the only sensible course of action.

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2 Responses to “Update”

  1. Not_an_IFA Says:

    Whoa, steady on there, Jonathan.

    In what respect aren’t the details of CAB2011 not finalized – there’s a signed off set of rules by the trustees?

    What does an independent valuation mean and what is its relevance? Its up to the regulator to sign off what the trustees have decided. The BBC used the same assumptions from its last valuation in 2006 to estimate the deficit (which as it turns out, were right), so on what basis do you or the NUJ declare them to be questionable? As far as I can tell, the trustees, many of whom are in the unions’ pockets, are responsible for the valuation assumptions, NOT the BBC. I thought you guys at the BBC checked your facts before making wild assertions?

    I don’t know anything about your third assertion, but I think its very dangerous for you to be ‘advising’ people not to make decisions about their futures. How will you feel if someone is disadvantaged by your blog?

    Lastly, I expect you will delete my comments, but I expect you don’t like to hear dissenting voices at the BBC.

  2. renouj21 Says:

    Thanks for your comments, always happy to engage in debate, that’s part of the point of a blog, isn’t it?
    To take your points one by one.
    The BBC has agreed the rules for CAB2011 with the trustees, but as I clearly said in my post, they have not yet published them. They are still the subject of dispute with the unions: for example, a new phrase has been slipped in allowing the BBC to redefine basic salary.
    There are several reasons for questioning the actual size of the deficit. One of the principle reasons the union called off its strikes last year was an agreement that if the deficit was less than £1.5 billion, then the BBC would re-open the entire pension negotiation. It has come in at £1.59 billion. The NUJ at least seems interested in finding out whether the assumptions that were used to arrive at this figure are not making the deficit appear bigger than it really is. I don’t blame them. As I blogged last year, one of the key assumptions is the “covenant” that is assumed to exist between the BBC and its pension fund – basically, how committed the BBC is to its obligations. The BBC can vary the size of the deficit simply by hinting it isn’t as committed as it was. Furthermore, the deal the BBC has agreed to pay off the deficit comes in at £200 million less than the size of the deficit. This implies rather strongly that the BBC doesn’t think the deficit is really quite as big as the headline.
    I feel entirely comfortable recommending that people don’t take action until later in the year. They are at no risk of losing anything, since they have until the end of the calendar year to make a decision.
    Jonathan

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