Field ‘appalled’ at BT for appealing indexation rulings

Work and Pensions Committee chair Frank Field has said he is “appalled” that BT has decided to appeal against the court judgments that ruled it could not change its pension scheme's indexation measure.

Field reportedly told 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”.

“There are plenty of questions about the sustainability of all kinds of pensions. But in this case, BT employees were promised, and planned on, a certain measure to keep their pensions’ value through the years of work to retirement. That is what they should get,” Field said.

In December 2018, the Court of Appeal upheld the High Court’s ruling against BT in which the communications giant sought to switch the measure of inflation it uses with regards to its pension scheme indexation.

BT wants to change the index for calculating pension increase for its members in Section C of its scheme, from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI).

If BT’s next appeal is successful, more than 80,000 members stand to lose an average of £24,000 in pension benefits, as CPI is usually lower than RPI. The switch could transfer an estimated £2bn of wealth from BT pensioners to shareholders.

In response to Field’s comments, BT told The Times: “In both cases, we believe that this is the right course of action, taking into account the interests of all our stakeholders, including past and present employees and BT’s shareholders.”

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