BT Pension Index Linking

barbelhunter

Regarding page 22 of the rules

Your reading of this is that the indexation of the BT pension scheme is the same as the Principle Civil Service Pension Scheme.[/QUOTE]

but............... why shouldn't our understanding of this be that...... indexation of the BT Pension Scheme is the same as the Principle Civil Service Pension Scheme as per (original legislation) but if the Government of the day chooses to alter that legislation then that's where the similarities must come to an end.

In other words I still do not understand why BT would have an automatic right to amend the rules of our scheme and for those of us who have contributed under that rulebook, that 'contract' for 30+ years to have to sit back and let it happen............well surely it cannot. Am I being naive?

hugheskevi

I still do not understand why BT would have an automatic right to amend the rules of our scheme and for those of us who have contributed under that rulebook, that 'contract' for 30+ years to have to sit back and let it happen

They couldn't amend the rules of the scheme retrospectively. But the key point is that the rules of the scheme, as written, mean that if nothing is changed then indexation moves to CPI. The scheme rules themselves would not have to be changed to achieve the move so the contract under which you contributed has not changed.

Public sector workers are in the same position - they thought that they were contributing under a contract which stated pension increases would be based on RPI. In fact, they were contributing under a contract where increases would be based on the Government's view of the change in prices. That view changed from being based on RPI to being based on CPI. The scheme rules themselves did not change.

well surely it cannot.

There is doubt and that is what the legal and actuarial advice BT is taking is about, and why at the moment no-one can be 100% certain whether indexation will be based on CPI or RPI.

(for avoidance of any doubt, I have absolutely no connection with BT and everything I write is based on publicly available documents)

hugheskevi

News out about BT pension scheme, link here to the BBC website article.

traineepensioner

hugheskevi wrote: »

News out about BT pension scheme, link here to the BBC website article.

I wonder if they'll reduce the actuarial reductions for early retirement.....it's certainly going to cost them less..... This could be a test for the trustees!

Trainee Pensioner

Ypaymore

http://www.guardian.co.uk/money/2010/nov/04/bt-pension-changes-retirement-incomes

919er

I'm a BT Pensioner and I, together with thousands of others, took early retirement (which BT wanted us to do to reduce staff and cut costs) on an agreed package which included RPI linked increases to pensions.

As far as I, and lots of others are concerened BT is breaking that agreement. It may well be that this index linking is "ruled" by whatever the government decide in the small print but this was not exposed at the time of us leaving and therefore remains a disgenerous act.

Taken together with the way BT have jumped with indecent haste to extoll the virtues of the money they will save with no due regard for their current and ex employees future living standards there is huge annoyance at this so called reform.

Interesting isn't it that (as has been said) senior BT executives pensions probably won't be affected. Also if CPI had been applied last year then we would have had a rise instead of nothing under RPI. So change the game to suit yourself BT!

I am in contact with a fair number of ex colleagues who are all angry at this change, a lot of which are also loyal BT Broadband/Phone customers and shareholders. I will be encouraging them to reply to any letter recieved on this reform personally to whoever signs it, pointing out that although BT can do this, they don't actually have to, and as such we regard it as an agreement broken, As a consequence we should all cancel our Broadband and Telephone services and go with another supplier - 200,000 or so cancelations would cost them a lot of revenue - we'll act with indecent haste like they have done!

cvd

I wonder if they'll reduce the actuarial reductions for early retirement.....it's certainly going to cost them less.....

They should also change the commutation rates (presumably these exist for the BT pension) - but then a future government may switch to another inflation index making any such calculation invalid. What a mess.

Andy_L

919er wrote: »

I will be encouraging them to reply to any letter recieved on this reform personally to whoever signs it, pointing out that although BT can do this, they don't actually have to,

Actually I believe they have to switch, as per TraineePensioners post increases are in accordance with the various pensions acts so have to change with those acts. If they wanted to do otherwise they would have to amend the scheme rules to allow them

919er

Andy_L wrote: »

Actually I believe they have to switch, as per TraineePensioners post increases are in accordance with the various pensions acts so have to change with those acts. If they wanted to do otherwise they would have to amend the scheme rules to allow them

Well Steve Webb (Lib Dem Pensions Minister) has been lying on TV then because he said just what I said, It's enabling companies to do it but they don't actually have to.

In any case if BT and the Trustees wanted to protect it's pensioners then indeed they could change the rules to specify RPI and/or they could increase pensions by any agreed provision they like. For instance State Pensions will in future be increased by CPI/Average Earnings/2.5% whichever is greater. The rules are always open for change.

However pigs might fly and we're not holding our breath - it ain't going to happen - the rich and powerful mess up and the ordinary person pays.:( :beer: 20% VAT anybody?

RegJ

Dare I say that once again the unions fail us...

In pension I still pay into Connect. Perhaps I can recover some of the lost increase by closing my union membership!