Dec 4, 2018

BT loses case over switching to cheaper pension index

BT, which has one of the largest private sector pension schemes in the UK, has suffered a setback after losing a court appeal against its plan to change the basis for calculating pension rises for up to 80,000 members. The telecoms operator had asked the Court of Appeal to overturn an earlier ruling on its interpretation of the scheme's rules and on whether it could switch to a different cost of living index for calculating increases to pensions paid in the future. BT had argued it had the power, in consultation with the scheme pension trustees, to decide whether the retail prices index had become "Inappropriate" for calculating increases to pensions for so-called "Scheme C" members. BT has been grappling with its pension deficit for years and was forced to pay £1.5bn into the scheme in 2015 and £2bn in 2012 on top of increased annual top-up payments to reduce the gap. It said last month that its pension liabilities could rise by "Hundreds of millions of pounds" because of a court ruling in October involving Lloyds that will compel the bank to make an equalising payment to female members of its pension scheme.

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