BT's non-management employees have approved a pension deal that will see the telecom company close its defined benefit (DB) scheme.
The agreement between the company and the Communication Workers Union (CWU), which also included a pay rise of 6 per cent over two years, was reached in March, with the union balloting its 45,000 BT workers.
The staff will be moved to a new hybrid pension arrangement over the coming year, which will combine elements of both DB and defined contribution (DC) pension schemes.
This new plan will be available to members of the current DB scheme, which will close for future service in June.
The hybrid pension is due to be set up later this year, following further discussions between BT and the CWU.
In the meantime, the current final salary scheme members will be opted into the company's DC plan.
Currently, 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.
The scheme's triennial valuation showed that the BTPS deficit had grown to £13.9bn up from around £10bn in 2015.
The deal was achieved following a consultation with employees, after which BT updated its plans and will make additional transition payments to all ex-BTPS team members moving into the BTRSS.
The company will also provide a higher maximum BT contribution rate of 11 per cent for an extended temporary period.
CWU members voted to accept the pay offer by 78.6 per cent; 58.2 per cent of BTPS members voted to accept the proposals, and BTRSS members voted by 81.2 per cent to accept.
Andy Kerr, CWU's deputy general secretary telecoms & financial services, is pleased that BT staff backed the agreement.
He said: "This has been a difficult, complex and emotive issue, especially for those in the BTPS.
"We said that BT could pay more and we deserved a better deal. By working together we significantly improved BT's proposals and achieved a better deal for our members."
maria.espadinha@ft.com
