The error led to BT underpaying the employer contribution to the women's pension funds while they were on maternity leave.
The women, numbering about 1,500 in total, were all members of the BT Retirement Plan or the BT Retirement Savings Scheme and had taken a period of maternity leave between April 2001 and February 2011. Some of the women had taken more than one period of leave during this time.
Women on maternity leave continued to pay their own pension contributions based on the actual pay they received, which is correct, but BT's matching employer contributions were based also on actual pay rather than the level of the full salary to which the women were entitled had they not been on maternity leave. This resulted in an under-payment of contributions during the period of the leave.
Women on periods of maternity leave starting from February 2011 have had the correct employer contributions paid and the error does not affect service in, or members of, the BT Pension Scheme.
The error was spotted and raised by a handful of affected members and, in particular, as a result of the work of Prospect member Amy Hoy, a Business Improvement Manager in Openreach, and Nick Toombs, one of Prospect's Pensions Champions in Global Services. It was Amy who spotted that there was something wrong with the way her pension contributions had been calculated. Amy said:
'I was very surprised when I worked out that my pensions payments had not been calculated correctly following maternity leave. However, I always felt confident that BT was a responsible organisation and would make amends for the error once it had been acknowledged.'
In paying tribute to the proactive way that Amy persisted with her case, checking maternity pay rules with all of HMRC, the Pensions Advisory Service, Standard Life (which provides savings and investments for BT's new pensions schemes) and Accenture, Nick said:
'This was the most unusual and intangible pension query I have come across. I researched a lot of info for myself and Amy to check over first and raised the issue with Accenture initially to query the way that the BT Retirement Plan was interpreting the rules on pensions contributions during maternity leave, which we felt to be ambiguous. When this didn't result in any clear answer, it meant further investigation was needed which Amy pursued for two years right through until this resolution.'
Following an understandably lengthy process of identification and cross-checking, BT is seeking to put the error right by calculating the number of investment units in the pension scheme which affected individuals would have had, had the correct contributions been paid on time.
Communications will be sent out to those affected over the next few months and it will advise the individuals of the number of units required to correct the position. This is necessarily a very complex calculation which will vary from individual to individual. The letters that BT is writing to the individuals that it has identified seek to explain the position, and to provide the calculation in detail.
Please note that Prospect is not able to cross-check the calculation that BT has made; if you do require further information, please address your questions to the company directly. Equally, if you are reading this notice and do not receive a letter from BT over the coming months and think you should have – i.e. because you took a period of maternity leave during April 2001 to February 2011, and were a member of the BT Retirement Plan or the BT Retirement Savings Scheme at the time – you should contact BT. This particularly applies to Prospect members reading this who may no longer be working for BT.
The final word, however, should go to Amy, who said 'I would like to thank the BT Pensions Team, Prospect and the Pensions Advisory Service for their hard work in helping to rectify the situation. I understand that it has taken some time to confirm the final payments due to the number of women involved and the complex nature of the calculations, but I'm absolutely delighted that the error has been corrected and that the women will be appropriately compensated.'