Appeal Court rejects BT bid to reduce pension increases for 80,000

Appeal Court rejects BT bid to reduce pension increases for 80,000

BT has lost its legal bid to apply lower pension increases for about 80,000 members in Section C of its defined benefit BT Pension Scheme, after the Court of Appeal today upheld an earlier High Court decision.

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More than 80,000 members of Section C stood to lose an estimated £24,000 in pension benefits on average if the appeal had been upheld, because CPI is generally lower than RPI. Any switch would have transferred an estimated £2bn of wealth from BT pensioners to shareholders.

Prospect national secretary Noel McClean said: “We welcome the Appeal Court’s decision to uphold the original High Court ruling.

“BT was seeking to cut the future incomes of BT pensioners and current employees by tens of thousands of pounds in order to transfer an estimated £2bn to shareholders, and Prospect does not believe this was acceptable.

“Only last week the High Court prevented BT from attempting to cut the benefits of 8,000 people in Section B of the same pension scheme, albeit using a different mechanism. 

“Prospect welcomes both rulings, which protect the interests of employees rather than shareholders.”

In the CPI v RPI case, the Court of Appeal also refused permission for BT to appeal to the Supreme Court.

BT expressed disappointment at the ruling and said it would consider the judgment closely before deciding next steps. The company pointed out that pensions in payment to members of Sections A and B of the BT Pension Scheme are already subject to annual increases based on CPI.

The original High Court ruling and BT appeal both centred on the wording of the rules of Section C of the BTPS – particularly the requirement that RPI must have “become inappropriate”  before another index for increasing pensions can be introduced.