BT Pension Scheme : Section C pensions in Payment


BT Pension Scheme : Section C pensions in Payment

BT and the BTPS Trustee have written today to all members of Section C of the BT Pension Scheme, both past and present announcing their decision to take a case to court to determine whether it would be possible for them to change from RPI indexation for the purpose of calculating Section C pension increases for the future.

This means those who are current Section C pensioners as well as those who are expecting a pension from Section C in the future, whether or not they are currently working for BT. Section C of the scheme operated between 1 April 1986 and 31 March 2001; if you were hired between these dates then you are almost certainly a member of this section of the scheme.

BT is taking court action to confirm whether or not it does have the power under the wording of the Section C rules to switch to the Consumer Price Index measure for applying increases to pensions in payment (CPI is already used for indexing the final salaries of deferred pensioners; the court action concerns solely the question of how pensions in payment are indexed). Currently, the rules prescribe that BT must use the Retail Price Index until such time as that is no longer published or has ‘become inappropriate’. Do note that the action concerns not just indexation rights in respect of future service, but whether or not BT can switch to the CPI measure for all of Section C service, including that already earned by service to date.

The letter confirms that BT is undertaking the court action and giving past and present members of Section C some information about how the case will proceed.

Prospect, nationally, has consistently campaigned against changing indexation from RPI to CPI but whilst we are fully aware of the case we are not formally a part of it. We can, however, confirm that we have had the opportunity to meet the person taking the case (called the ‘representative beneficiary’), who works for BT, and her independent firm of lawyers (Stephenson Harwood LLP). As members will expect, we have taken that opportunity to ensure that the interests of Section C members are represented effectively. Together with Michael Furness QC they will argue in court around the construction of the words in the scheme rules and whether they allow BT to make the change. We will, naturally, be keeping in close contact with the legal team as the case progresses.

Section C members, regardless of whether they are current or future pensioners of that section of the scheme, should note that they do have the opportunity to contact the legal team of Stephenson Harwood advising the representative beneficiary via e-mail and postal addresses which have been set up especially for the purpose. We would encourage our members in Section C to take advantage of that opportunity and, as far as our reps are concerned, to encourage any members approaching them to direct their questions to Stephenson Harwood at the address details confirmed in the letter.