...NAPS debt has now increased by circa 130% since the last valuation...
It rather depends how you work out the figures. The City certainly haven't been duped, unlike a lot of BA employees. Both deficit calculations (2003 and 2006) were worked out using different methods. The former method was the legal accounting standard at the time for calculating the deficit. However, the 2006 figure (IAS19) is considered to be the more accurate. What am I getting at?
The 2003 deficit was £928 million, not using IAS19. Had the same (less accurate) method been used this time round, the deficit would indicate around £960 million. Therefore the deficit would have increased by 3%.
This more accurate IAS19 standard was available in 2003 and would have generated a deficit of £1.6 billion.
Therefore the deficit has increased by 31%.
However you look at it,
IT IS INCORRECT TO COMPARE THE £928M OF 2003 WITH THE £2.1B OF 2006.
BA knows this. So why haven't they republished the 2003 deficit using the more accurate IAS19 standard, so that we can compare like for like?
IMHO because they can legally get away with not doing so. If they can say to the employees that the deficit has more than doubled and we need to shaft you for half your pension, it sounds far worse than to say that it has increased by a third and we need to have a chat about slight changes to your benefits.
Yes, it is that simple. I'll let an accountant explain the detail.