BT shuts down defined benefit pensions for 10,000 managers
Telecoms giant BT has announced that it is to close its defined benefit pension scheme for 10,000 managers as part of efforts to contain a yawning deficit.
The decision follows a review of its pension policy, with BT confirming that the scheme will close for the managers for the future build-up of benefits from May 31.
From that date, pension contributions for those affected will go into a new individual, defined contribution "Retirement Saving Scheme".
Meanwhile, 12,500 managers under the company's retirement saving plan will see their contribution rates increased to a maximum of 10% of pensionable salary.
For 20,000 team members who are not managers, BT is still "reviewing feedback" and will continue talks with the Communication Workers Union before making a final decision.
The move comes as BT bids to plug a gaping funding hole in its pensions book.
At last count, the group had an actuarial pension deficit of £13.9 billion.
BT group HR director Alison Wilcox said: "We are working hard to ensure fair, flexible and affordable provision for members of our pension schemes.
"I am pleased that we've been able to reach an agreement with Prospect (union) that achieves this, and we look forward to continuing our dialogue with the CWU."
BT will also appeal over a High Court ruling which stopped it from switching the way pension increases are measured.
The group wants to tie pension increases from the retail price index to the consumer price index.