Thousands of members in BT's final salary pension plan could see their retirement nest egg hit as the telecoms giant looks to fill a hole in the scheme by lowering pay-outs.
The firm is seeking approval to switch the rate used to calculate pension increases for about 80,000 members from the retail prices index (RPI) to the lower consumer prices index (CPI) in a High Court hearing later this year.
BT could benefit from huge savings by switching from using RPI, which rose by 3.9 per cent in August.
The move will mark the biggest step yet taken by BT's chief executive Gavin Patterson since 2013 in a bid to get to grips with the huge pension bill.
In a statement BT said: “As part of the pensions review, we’re reviewing the use of RPI as the index for calculating increases to pensions in payment for Section C members in the BT Pension Scheme, and liaising with the BTPS Trustee about this.
“The scope of this review includes the future increases received on benefits already built up in the BTPS, including by Section C members who have left BT and those who are currently receiving a BTPS pension.
“Having agreed the approach with the trustee, we are seeking clarity, through a Court application, on whether it’s possible to change the index.”
