BT has confirmed its plan to close its defined benefit BT pension scheme for 10,000 managers, it has been reported.

Following the conclusion of BT’s consultation on the DB scheme (BTPS) and the defined contribution BT Retirement Saving Scheme (BTRSS) and talks with workers union Prospect, a number of changes have been confirmed.

BT’s agreement will see the closure of the BTPS to managers for the future accrual of benefits on 31 May 2018. From this date onwards, pension contributions for those affected will go into the new BTRSS scheme.

All benefits accrued in the BTPS for service prior to 1 June 2018 are protected, BT has added. BT will be working with the trustee of BTPS to ensure that required changes are made by this date.
The BT DC scheme, the BTRSS, has been offered to all employees joining the company since 2001.

BT has noted that it is still reviewing feedback and is in discussions with the Communication Workers Union regarding the pensions of other employees that aren’t managers.

BT group HR director Alison Wilcox said: “We are working hard to ensure fair, flexible and affordable provision for members of our pension schemes. I am pleased that we’ve been able to reach an agreement with Prospect that achieves this, and we look forward to continuing our dialogue with the CWU.”

Prospect national secretary Philippa Childs commented: “During a very difficult negotiation we secured decent protections for those having to transfer for future service, as well as improved employer contributions for people already in the BTRSS. Since the ballot result, and the end of BT’s own consultation with staff, we have gone back to the employer and won yet more concessions.”

Improvements that have been achieved by Prospect include: allowing people in the DB scheme to be moved into the BTRSS from June rather than April 2018, allowing managers in the BTPS to continue to make additional voluntary contributions into their old scheme after it closes – until 31 September 2019 and the increase of contribution rates to rise for the DC scheme from 1 June.

The standard contribution rates will rise by a maximum of 10 per cent of pensionable salary.
In addition, From 31 May 2018, BT will introduce an option for managers aged 55 or over to draw their BTPS pension while continuing to work for BT for a further two years.

Childs added: “Prospect fully understands that this has been a very difficult time for our BTPS members.

“However, we have made some valuable improvements to the pension proposals in response to members’ concerns. We have also achieved a better pension and certainty for those already in the defined contribution BTRSS.”

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