High Court rejects BT’s plans to reduce pension benefits

Published by Rachel Lacey on 23 January 2018.
Last updated on 23 January 2018

High Court rejects BT’s plans to reduce pension benefits

BT’s plans to reduce its pension deficit by cutting the benefits it pays to its members has been rejected by the High Court.

The decision is good news for 84,000 former and existing BT employees that joined the telecoms firm after it was privatised in 1984.

BT had wanted to reduce its £14 billion pension deficit by changing the inflation measure its benefits are linked to from the retail prices index (RPI) measure of inflation to the consumer prices index (CPI). In December 2017 – the most recent figures available – RPI stood at 4.1% compared to just 3% for CPI.

Commenting on the result, Philippa Childs, national officer at union Prospect says: “Prospect has consistently campaigned against changing indexation of pension schemes from RPI to CPI, as CPI is normally around 1% lower than RPI.

“The outcome of this case is welcome as this action has caused anxiety among active and deferred members and pensioners.

“However, BT has told members of the scheme that it will be considering next steps after the ruling including the possibility of an appeal. Prospect will be closely monitoring the actions of BT to ensure that our members views are heard and taken into account.”

In a statement issued following the ruling, BT says: “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.”  

But Kate Payne, a partner at ARC Pensions Law, points out that although the decision from the High Court protects certain BT scheme members it does appear to be a double standard.

She says: "It seems ironic that the government has been able to enjoy significant savings since 2011 by changing the inflation protection measure for pension increases in its own schemes from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI), but BT cannot in 2018.

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As a former BT employee I

As a former BT employee I wouldn't trust BT management half as far as I could throw them. (I'm actually a 'GPO' employee insofar as I joined the service in 1969)