UK Edition
Unions in 'absolute opposition' to BT pension scheme closure
BT faces a strike threat after unions said they will consider industrial action if the company presses ahead with the closure of its final salary pension scheme.
The news comes just days after The Sunday Telegraph reported that thousands of BT pensioners could have their retirement pots capped.
The firm's defined-benefits pension scheme has more than 300,000 members, and although the scheme had been closed to new entrants in 2001, existing members continue to build up benefits.
BT has begun informal talks in an attempt to stop the bill rising further. A source close to the early-stage talks said: "You don’t reduce the benefits but continuing to accrue them is nearly economically impossible."
The Communications Workers’ Union (CWU) on Tuesday said it had been advised that BT was planning to review the current arrangements and had been given notice for the 2008 pension agreement to be terminated. This agreement raised the pension age to 65 and introduced career average benefits.
The CWU said the review and termination will "naturally be of great concern" to all its members and said it had "made it clear that we will use all means up to and including industrial action to keep the scheme open for current members".
In the CWU's statement, the union said there were "unlikely" to be any developments over the coming months and that it was now "commencing negotiations with BT over its plans for the future".
The CWU added, however, that BT "stated that nothing has been ruled in or out and that if any changes are necessary it will be seeking to do this by agreement with the CWU".
Trade union Prospect also confirmed on Tuesday that BT would be initiating a review of the scheme given that "conditions have worsened", and a BT spokesman later said: “We can confirm we are starting a review of the BT Pension Scheme (BTPS) benefits."
BT said it would consult with trustees and unions on any changes to its pension scheme.
The spokesperson added there were "no firm proposals at this stage and nothing has been ruled in or out".
"We are hopeful that we can reach agreement with the unions on the best way forward for our pension schemes which are in the interests of both our employees and BT.”
A new valuation for BT's pension scheme shortfall is set to be carried out in June, with expectations the deficit could have increased to as much as £14bn from £7bn at the last formal valuation.
The opposition follows a similar condemnation last month of Royal Mail's new pension proposals, described as a “defined benefit cash contribution scheme”.
The postal operator had said it was planning changes amid concerns about its long-term affordability, but these were branded "both premature and arrogant" by the CWU.