Defined Benefit  

BT denied appeal in pensions court case

BT denied appeal in pensions court case

A legal dispute over the index used to calculate pension increases for members of one of BT’s defined benefit schemes has come to an end after the company's request to appeal was denied by the Supreme Court.

The decision concerned a ruling made by the Court of Appeal in December, and related to a request made by BT to switch from using the Retail Prices Index to the Consumer Prices Index when calculating annual pension increases for 80,000 members of Section C of the BT Pension Scheme.

CPI is generally lower than RPI, and the latter hasn’t been considered a "national statistic" by the Office for National Statistics since 2013 because the formula used to calculate it did not meet international standards.

The case was taken to the High Court in December 2017 and concluded in January 2018, when it was decided the scheme’s underlying index could not be changed.

A BT spokesperson said: "We confirm that BT has been refused permission by the Supreme Court to appeal the Court of Appeal’s decision concerning the index for calculating pension increases for Section C members of the BT Pension Scheme. While we are disappointed, we do, of course, accept the Supreme Court’s decision."

According to union Prospect, if BT had been able to change the index used to calculate pension increases, the scheme members would have stood to lose an estimated £24,000 each from the switch.

Noel McClean, Prospect’s national secretary, said: "We welcome this decision by the Supreme Court that prevents a blatant attempting at cutting the value of members' pensions in retirement by tens of thousands of pounds.

"This is a victory for members of Section C of the BT Pension Scheme that finally brings this matter to a close after a long and protracted legal battle."

In the meantime, the telecoms company was granted permission in May to appeal a different pension ruling which could see benefits reduced by an estimated £120m for 8,000 DB scheme members, according to Prospect.

This concerned how future payments would be calculated for some members of Section B of the BT Pension Scheme.

BT is fighting the government's plans for public sector pension schemes to 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.

maria.espadinha@ft.com

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