BT was seeking approval to switch the rate used to calculate pension increases for about 80,000 members from the RPI to the lower consumer price index (CPI).
The case was taken to the High Court in December and concluded on 19 January, when it was decided the scheme’s underlying index could not be changed.
In a statement on its website, the BT pension scheme said: “Today the High Court has published its judgment as to the correct interpretation of the Scheme Rules regarding BT’s ability to change from RPI to another index for the purpose of calculating Section C pension increases paid in the future.
“The High Court has determined that it is currently not possible to change from RPI to another index.”
It added the trustee would be analysing the judgment and provide a further update once this is concluded.
In a statement on its website, BT, which brought the case, said it it "disappointed with the decision and will now consider the judgment in detail in order to decide next steps, including the possibility of an appeal".
"The relevant index for pension increases for members in Sections A and B of the BTPS remains unchanged as the Consumer Price Index (CPI)," it added.
Trade union Prospect said it was pleased about the outcome.
Prospect national officer Philippa Childs said: “Prospect has consistently campaigned against changing indexation of pension schemes from RPI to CPI, as CPI is normally around 1 per cent lower than RPI.
“The outcome of this case is welcome as this action has caused anxiety among active and deferred members and pensioners.
“Prospect will be closely monitoring the actions of BT to ensure that our members' views are heard and taken into account.”
It is understood BT could benefit from huge savings by switching from using RPI, which rose by 3.6 per cent in the second quarter of 2017 and is expected to be hovering around the 3 per cent inflation mark by 2020, according to the Office for Budget Responsibility.
CPI inflation, in contrast, was 2.7 per cent in Q2 2017 and is expected to be levelling out at the 2 per cent mark by 2020.
The court action marked 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 at the time 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.”
Meanwhile, Prospect is also in the process of finalising a pension deal on behalf of BT managers.
In early January it was revealed managers had accepted a pay and pensions offer which will see them move from the company’s DB scheme to its defined contribution (DC) plan.
BT manages two pension schemes: the British Telecom Pension Scheme (BTPS), a final salary scheme with more than 300,000 members, 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 with assets of more than £40bn.
A consultation on the proposed changes was launched last November, which included an increase in pay of between 1 and 2 per cent; 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 57 per cent of BTPS members voting to accept the proposals and 85 per cent of BTRSS members voting for the changes.
Kusal Ariyawansa, chartered financial planner at Manchester-based Appleton Gerrard, said he could see both sides in the latest BT action, the trustees wanting to do what they can to try and steady the ship and past employees retaining what was promised to them.
But he said: "It is good to see past employees preserve what was promised. If the company needs to steady the ship it should look at the hierarchy and its profit awards as a starting point."
carmen.reichman@ft.com
