BT Request to Change Pension Increase Index Is Turned Down

Lloyd Doyle
January 20, 2018

Telecoms giant BT can not change the index it uses to calculate pension increases for certain members of its pension scheme, according to a United Kingdom court ruling today.

Andy Kerr, deputy general secretary of Telecoms and Financial Services at the Communications Workers Union, said: "We welcome the news that the uncertainty on this issue has been resolved, and that the Court has upheld the use of the RPI as the relevant index for pension increases in Section C of the BT Pension Scheme (BTPS)".

The BT scheme's other sections, "A" and "B", are for staff who joined the company after 1984.

"The outcome of this case is welcome as this action has caused anxiety among active and deferred members and pensioners". However, a funding update issued by the trustees past year put the deficit at almost £14bn as of 30 June 2016.

While the 83,000 or so members of Section C of its scheme use the RPI, which now stands at 4.1 per cent, the other 213,000 members, known as Sections A and B, use the consumer prices index (CPI), which is at three per cent.

The High Court judgment on Friday was to deny this application.

A spokesperson for the scheme said the trustees would consider the judgment with the company.


It added the trustee would be analysing the judgment and provide a further update once this is concluded.

The court ruling comes as BT has just completed a consultation on changes to its main DB and defined contribution (DC) schemes.

"This is an important judgement that secures the current rights of scheme members".

As an alternative, the company proposed keeping BTPS open on a significantly amended basis, whereby benefits would increase more slowly in future and members would have to contribute more.

Following discussions between management and affected employees, BT said it was "considering their feedback before concluding the review".

Trade union CWU has opposed the proposals.

Other reports by Iphone Fresh

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