The company wants to close the defined benefit BT Pension Scheme (BTPS) to future accrual for this group from April 2018, and transfer affected working members into the defined contribution BT Retirement Savings Scheme (BTRSS). Staff joining BT since 2001 have only been able to be in the BTRSS.
After intense and difficult negotiations with BT since it announced its pension review in April, Prospect will recommend a “yes” vote in a ballot on the pension changes during December. (The ballot will also consult members on proposals that put an end to a pay freeze for managers).
Philippa Childs, Prospect national secretary, said: “While we are not happy about the pensions changes, we have done what we can to protect the best interests of our members, who are managers and professionals, in these difficult times.
“We have negotiated improvements to the contribution structure in the BT Retirement Savings Scheme. The company has agreed to pay more into the BTRSS to support the future pensions of all members. It will also make extra transitional payments for those switching from the old scheme.
“The company will also introduce more flexibility around retirement options.
“We explored the potential for resisting these changes but feedback from members was that we should negotiate the best possible outcome and ballot them on that basis.”
Prospect will be holding members’ meetings across the UK ahead of the ballot and is also encouraging all members to send their views to the company.
Guarantees secured by Prospect include:
- BT will increase its employer contribution for all members of the BTRSS scheme by 1%-2%. For example, if a member currently contributes 5% of their salary and BT 7%, the employer contribution will rise to 9%.
- BT will pay higher transitional contributions for ex-BTPS members moving into the BTRSS – the amount will depend on the age of the individual transferring.
- After closure to managers, BTPS benefits that working and retired members have accrued so far will continue to be increased annually, subject to the scheme and section rules.
In 2009 the BT Pension Scheme was changed from a final salary to a career average scheme, with increases in employee contributions. At the time BT and unions believed this would make the scheme sustainable.
However, a deficit of around £13.9bn and the projected costs of future accrual led BT to change its mind in the current economic climate.
BT is consulting non-managers, represented by the CWU, on two different options. The first is to close the BTPS to team members (in the CWU) for future accrual, with the same transition arrangements as Prospect members. The second is to keep the BTPS open to them, but only with higher staff contributions, introducing a cap on pensionable pay increases and an inferior accrual rate of1/120ths.
CWU has reached no agreement with BT, meaning the company will do one or the other at the end of the consultation process.
Childs said Prospect had decided against the latter option for managers and professionals in the light of the improvements it has negotiated for those transferring to the BTRSS.
- More details of the changes are available here.
- Members in BT belong to the Communications and Digital division of Prospect’s more than 40,000-strong BECTU sector.