Managers at British Telecom (BT) have accepted a pay and pensions offer which will see them move from the company’s defined benefit (DB) scheme to its defined contribution (DC) plan.
Trade union Prospect, which represents managers and other professionals working on the telecom company, balloted its members on an offer negotiated at the end of last year.
BT manages two pension schemes: the British Telecom Pension Scheme (BTPS), a final salary scheme with more than 300,000 members and assets of more than £40bn, and the British Telecom Retirement Saving Scheme (BTRSS), a DC plan that has been in place since 2001.
Although the BTPS closed to new entrants in 2001, existing members continue to build up benefits and by some measures it is the largest private sector pension scheme in the UK.
A 60-day consultation on the proposed changes, which included closing the DB scheme to future accrual from April this year for around 11,000 managers employed pre-2001 and moving them into the BTRSS, was launched last November.
This proposal included an increase in pay by between 1 and 2 per cent depending on performance rating and position in pay range; extra transitional payments for members who are being moved out of BTPS to BTRSS, and an increase in employer contributions for existing BTRSS members.
The ballot closed on Friday 5 January, with 74 per cent of all members voting to accept the pay offer, and 60 per cent voting to accept BT’s pension proposals.
BTPS members voted by 57 per cent to accept the proposals while 85 per cent of BTRSS members voted for the changes.
Philippa Childs, Prospect’s national secretary, said the vote gave the union a mandate on which to reach a final agreement with BT.
She said: "We recognise that this has been a difficult and painful decision for those who are currently members of the BTPS.
"However, the improvements we have negotiated and the transition arrangements will soften the blow for those having to move. Those who are already in the BTRSS, because they joined BT after 2001, will also see improvements."
Meanwhile, the Communication Workers Union, which represents some of the 21,000 non-managerial staff of the company, is urging its members to say no to all changes being proposed by the telecom company.
The scheme’s triennial valuation is due later this year which is expected to show that the BTPS deficit will to grow to £13.9bn up from around £10bn in 2015.