Jan 19, 2018

BT pension plans rejected by High Court

BT's plans to deal with its yawning pension deficit have been dealt a blow after the High Court rejected its proposal to switch the tool by which it is measured. The telecoms group had planned to change from using the retail prices index to the consumer prices index as one of the key measures to overhaul its pension deficit of £14bn. Bernstein, the analysts, had calculated that the move would have been worth £1.4bn to BT if it were approved. The court rejected the plan even though a portion of the company's scheme already uses CPI. A spokesman for BT said: "We are disappointed with the decision and will now consider the judgment in detail in order to decide next steps, including the possibility of an appeal." These include closing the older defined benefits scheme for 11,000 managers and encouraging employees to transfer to a defined contributions plan called the BT Retirement Savings Scheme. The potential cost of a new funding plan for the BT pension scheme weighed on the company's shares last year.

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