Defined Benefit 

BT granted permission to appeal pension ruling

BT granted permission to appeal pension ruling

BT has been granted permission to appeal a pension ruling, which could see benefits reduced by an estimated £120m for 8,000 defined benefit scheme members, a union has warned.

Workers union Prospect has branded the move "shameful" and is urging BT to drop the case. It warned the benefit reduction would represent an average loss of about £15,000 per member.

The ruling was made by the High Court in November and concerned how future payments would be calculated for some members of Section B of the BT Pension Scheme.

The company had started a legal process against HM Treasury in May 2018 after the government announced that public sector pension schemes would pay increases on guaranteed minimum pensions for people reaching state pension age between December 6, 2018 and April 5, 2021, to protect them against inflation.

This solution, which is expected to cost the government £5bn, also affects the BTPS, since the pension fund has links to the Civil Service Pension Scheme, dating back to before the FTSE 100 company was privatised in 1984.

A BT spokesperson said: "In early 2018 the government made a decision about how benefits are increased in public sector pension schemes, and by implementing it in a particular way it created an unintended impact on the BT Pension Scheme. 

"We pursued a legal process as we believed there are fairer ways for government to meet its commitments to public sector employees, without creating this impact on BT’s private sector scheme, and hoped the government would reconsider the route it decided to take.

"In November 2018, the Divisional Court refused BT’s application for judicial review of the government’s decision. We have now received permission to appeal the judgment from the Court of Appeal."

Prospect warned that younger members of Section B could also be affected by this court action, depending on future government decisions.

Noel McClean, Prospect’s national secretary, said it was "extremely disappointing that BT is continuing its legal attacks on its employees’ pension rights".

He added: "The High Court comprehensively rejected BT’s application for a judicial review, but the potential savings that would result from a successful appeal have clearly motivated the company to carry on this fight.

"But any savings would be coming from the pockets of its current and former employees and that would be completely unfair. Even at this late stage BT should do the right thing and drop this case."

maria.espadinha@ft.com