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BT appeal to change DB scheme to cheaper index fails

BT has lost a court appeal over plans to change the basis on which it calculates pension rises which would have lost money for 80,000 members in its defined benefit scheme.

The telecommunications company was looking to overturn a January ruling on the interpretation of scheme rules.

BT had sought a ruling on changing from the retail price index currently used to calculate increases to members in its scheme C pension, arguing it was no longer appropriate for its circumstances.

Around 80,000 members of the scheme would have been affected had the index been altered, with each standing to lose around £24,000 in future pension benefits.

The move to a different index, potentially the consumer price index, could have saved BT more than £1bn over time, according to analysts.

In the Court of Appeal dismissal yesterday, Lady Justice Asplin said the scheme rules had been interpreted correctly however and would not allow the change.

She said: “The judge was right to come to the conclusions that he did. Whether RPI has become inappropriate is an objective state of affairs.”

BT says it is “dissapointed” with the outcome of the appeal and will decide on its next steps for scheme C. Members in scheme A and B remain indexed by the CPI.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Looks like another DB scheme about to be closed then. Any takers how long before they close it.

  2. It`s a pity that NS&I can`t be similarly held to account over its proposed underhand change to Index-linked bonds from RPI to CPI next year.
    One rule for some and ……

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