29th January 2018 Kate Payne comments in Moneywise on High Court rejecting BT’s plan to reduce pensions benefits
The High Court’s decision to reject BT’s plan to reduce pensions benefits comes as good news for 84,000 former and existing BT employees that joined the telecoms firm after it was privatised in 1984.
BT wanted to reduce its £14bn pensions deficit by changing the inflation measure its benefits are linked to from the retail prices index (RPI) measure of inflation to the consumer prices index (CPI) but could not because RPI had not become “inappropriate”, as required under the rules of the BT scheme, because the government continues to use it as inflation protection in a number of cases, such as index linked bonds .
In December 2017- the most recent figures available – RPI stood at 4.1% compared to just 3% for CPI.
Kate Payne commented: “It seems ironic that the government has been able to enjoy significant savings since 2011 by changing the inflation protection measure for pension increases in its own schemes from the RPI to the CPI, but BT cannot in 2018 .”
Read Kate’s comments in Moneywise here
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