The earlier agreement was secured by the union after months of talks, in the wake of BT plans to close its defined benefit benefit pension scheme – the BT Pension Scheme – to managers for future accrual, and move them into the BT Retirement Saving Scheme.
The BTRSS is a defined contribution scheme offered to all people joining the company since 2001.
National secretary Philippa Childs said: “During a very difficult negotiation we secured decent protections for those having to transfer for future service, as well as improved employer contributions for people already in the BTRSS.
“Since the ballot result, and the end of BT’s own consultation with staff, we have gone back to the employer and won yet more concessions.”
The further improvements include:
- People in the old scheme will be moved into the BTRSS from 1 June 2018 rather than 1 April.
- BT will allow managers in the BTPS to continue to make additional voluntary contributions into their old scheme after it closes – until 31 September 2019 – thus covering two further financial years and two bonus cycles.
- On top of agreed transition payments, the period for additional employer contributions from the employer to those transferring has been extended from three to five years – up to 31 May 2023. So for example, during that time BT will pay 11% of salary for managers paying 8% of salary into the BTRSS.
- From 31 May 2018, BT will introduce an option for managers aged 55 or over to draw their BTPS pension while continuing to work for BT for a further two years.
- BTPS managers aged 55 or over who want to retire early will have the BTPS part of their pension actuarially reduced by a smaller amount – likely to be 3–3.5% , from 1 June 2018 onwards.
- BT has agreed to a discretionary transition period for BTPS managers currently being considered for medical retirement at the point that the scheme closes, to ensure this happens under the BTPS rules.
- The company will formalise medical retirement benefits under the BTRSS to make them transparent, in consultation with Prospect.
Alongside the pensions changes, Prospect has negotiated revised redundancy proposals, which will still come into effect from 1 April 2018 for all staff.
Childs said: “Prospect fully understands that this has been a very difficult time for our BTPS members.
“However, we have made some valuable improvements to the pension proposals in response to members’ concerns. We have also achieved a better pension and certainty for those already in the defined contribution BTRSS."
Childs added: “Prospect will continue to keep pensions at the top of our agenda and seek to further improve BTRSS provisions wherever we can.”
Commenting on the new redundancy terms, Childs said: “The new redundancy procedure being introduced alongside the pensions changes will give members in the BTRSS certainty for the first time ever.
“In practice the redundancy terms in the old scheme were rarely used by the company because they were considered too expensive and outdated, meaning departures were normally handled through private exit packages, so the new measures will also provide clarity for those transferring.”
- Childs said members who wish to seek independent financial advice can do so at preferential rates from Lighthouse Financial Advice, thanks to a long-standing arrangement with Prospect. Visit https://www.prospect.org.uk/member-benefits/financial/financialadvice (member log-in required).