BT plots to slash pension benefits for 32,000 staff
Gotta plug that £14bn deficit somehow
BT has proposed closing its defined benefit pension scheme for 11,000 managers and slash contributions to 21,000 frontline staff in a bid to plug a looming £14bn pension deficit.
The former UK state monopoly is set to begin a consultation with members of its two largest pension schemes tomorrow, The Reg has confirmed.
The plan is to shutter the defined benefit scheme for managers and move them to the enhanced BT Retirement Saving Scheme from April 1, 2018. They will still receive the retirement income so far accrued in the BT Pension Scheme when they retire.
For 21,000 non-managers in the pension scheme, BT has suggested to either close it or ask that members pay higher contributions and build up benefits at a lower rate.
The Communications and Workers Union branded the plans a "slap in the face to loyal employees" and is unsurprisingly urging members to reject them.
Deputy general secretary Andy Kerr said:
"BT is hoping that faced with the option of closure members will accept these radical changes and embrace significant cuts in their future pension. At the same time BT's estimated level of contributions for future service from 1st April 2018 would only marginally increase. There is no way this is acceptable or fair."
A BT spokesman told us: "We're looking to introduce changes to our pension schemes that will make them fair and flexible for all BT employees, while making sure they remain affordable to the company."
He said BT is improving contributions for those in the BT Retirement Saving Scheme, the pension arrangement for the majority of BT's UK employees. "But, at the same time, we need to take action to address the risks and costs of the defined benefit BT Pension Scheme.
"If we do nothing, BT will be facing hundreds of millions in extra contributions to the scheme, on top of our current costs. This would damage our ability to invest in the UK's communications networks, customer experience and jobs."
The employee consultation will run to January 17 with changes proposed to take place from April Fool's Day. ®