Wednesday, December 05, 2018

BT's pensions scam

BT has lost a legal bid to make changes to its pension scheme. BT sought a ruling on whether it could change the index used to calculate pension increases paid to “section C” members of its defined benefit pension scheme. It currently uses the retail prices index (RPI), but believes the rules allow a switch to another index in certain circumstances. Sections A and B of the scheme are linked to the consumer price index (CPI). CPI is generally lower than RPI, which is an index no longer widely used in government – prompting BT to argue that it had become inappropriate for increasing pensions. The high court decided in January 2018 that it was not possible to change to another index, and the court of appeal has now upheld that decision.

These members each typically stood to lose an estimated £24,000 in future pension benefits if the appeal had been upheld, according to the union Prospect.
Prospect said BT was “seeking to cut the future incomes of BT pensioners and current employees by tens of thousands of pounds in order to transfer an estimated £2bn to shareholders”.

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