BT loses latest attempt to switch pensions index

BT has lost its most recent attempt to change the indexation arrangements of part of its pension scheme, after the Supreme Court denied it permission to escalate the case.

It marks the end of a long-run legal battle between the telecommunications giant and its BT Pension Scheme (BTPS) members, in which switching to the Retail Price Index (RPI) would have resulted in roughly 80,000 Section C members losing out on a combined £2bn.

BT originally lost the High Court case in November last year, and the subsequent appeal in December. The latest loss for the firm means that it has no legal avenue to turn to.

Commenting on the decision, Communication Workers Union (CWU) assistant secretary, Nigel Cotgrove, said: “The CWU wholeheartedly welcomes the end of this misguided, unnecessary and expensive case designed to cut members’ future benefits.

“This news will come as a great relief to all Section C members who have been facing the real prospect of lower pension increases in the future.

“At last they have closure on an issue that has naturally been weighing on minds for a very long time now – but the CWU still views it as highly regrettable that BT persisted for so long in attempting to pursue an attack on pension benefits in the face of successive courtroom defeats.”

In February, Work and Pensions Committee chair Frank Field said he was “appalled” at BT’s decision to appeal the courts’ judgements, telling The Times that it is an “unseemly spectacle” and that rich companies are “trying to do their own loyal, long-serving employees out of sums which, though not modest, are so little to them compared to so much for tens of thousands of pensioners”.

Prospect national secretary, Noel McClean, added: “We welcome this decision by the Supreme Court. Had BT succeeded it would have had the potential to cut the value of members' pensions in retirement by many thousands of pounds.

"This is a victory for members of Section C of the BT Pension Scheme that finally brings this matter to a close after a long and protracted legal battle.”

According to its 2018 year-end results, BT’s defined benefit pension deficit increased by half a billion pounds (£500m) in the three months to 31 December 2018, ending the year on £5bn (net of tax).

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