BT Pension Index Linking

JohnB47

I think the problem for us (current and future) BT pensioners is that we are devided. There are those still working and are represented by the unions but there are also those retired and collecting pensions plus those retired and yet to collect. Those still not working have only the Trustees to represent us and they seem to have simply caved in.

I had heard that Trustees should not agree to anything that downgrades a pensioners benefits. Has anyone any info on that?Also, can anyone find any statement as to the legal obligations of a Pensions Trustee. Surely there must be a charter or some such?

In the absence of any common action or pressure group to speak on behalf of those no longer working for BT, I'm afraid that all we can do is write to our MP or to the Trustees. There isn't even a dedicated forum to air our views so those are fragmented too (I've only found this one plus one on the Motley Fool website).

MEY_3

In answer to 919er I believe that those who took voluntary redundancy or early voluntary retrirement may be in a different position to other pensioners for the reasons he/she highlights. Namely that their leaving was based on the contract agreed by them with BT at the time of their departure. The key may be whether RPI was explicitly mentioned in any documentation rather than just "pensions are index linked" for example.
As a BT pensioner who also opted for redundancy I have left a message on the CWU website to try to ascertain if they are proposing a challenge or will offer any assistance (including a website or area where BT pensioners can organise themselves) to fight the CPI/RPI change.

Goldwing1

I've just received my copy of BT Today (Staff newpaper) through the door. It confirms that all members of sections A and B of the scheme will now have increases determined by CPI

They are taking legal advice to see if they can apply CPI to section C members.

So, despite having paid into this scheme for 30 odd years, it turns out we can still be ripped off.

Ripoff_2

Goldwing1 wrote: »

I've just received my copy of BT Today (Staff newpaper) through the door. It confirms that all members of sections A and B of the scheme will now have increases determined by CPI

They are taking legal advice to see if they can apply CPI to section C members.

So, despite having paid into this scheme for 30 odd years, it turns out we can still be ripped off.

:jSee new post/tread called RPI to CPI Early Day Motion 1032

Goldwing1

Ripoff wrote: »

:jSee new post/tread called RPI to CPI Early Day Motion 1032

Found it, e-mail sent. Thanks.

However, I wonder even if it is a success, I wonder if BT will simply stay with the CPI calculation.

Mr_Moonraker

I left BT in 2008 and around that time I made additional payments into the BT pension; severance pay, AVC's, majority of my retirement lump sum etc. At the time I was assured this investment would be uplifted against RPI, this has now changed to CPI.

I have written to the trustees saying they should recalculate this portion of my pension, the income from a CPI annuity would be far greater than that of a RPI annuity. As far as I am concerned the members who put cash into the scheme have paid for a Roller and received a Mini. The trustees should act in the best interests of its members, it may not be able to do much about the Governments RPI/CPI change but I believe it could and should address this issue.

Any comments ? I may be talking a load of rubbish but if anyone agrees I suggest they also contact the trustees.

PS I’ve also complained to my MP regarding the RPI/CPI change.

RedTed

Every piece of pensions literature that I received during my 19 years at BT as well as subsequent years always stated any yearly rise to section a/b pensions would be based on the September RPI increase. As a CWU rep doling out pension advice and with the people in HR doing the same, RPI was,effectively, set in stone. As such there must be some form of accrued rights in this matter and maybe subject to legal challenge under custom and practice as English law allows. Not only that, if BT want to play the civil service card then they can give us all a 2/3rds final salary pension rather than 50% or aggregates thereof that people actually get.
There is also the question of contracting out of SERPS that people undertook under the impression that the scheme offered RPI rises.
I agree that the supine semi-acceptance of this by the Trustees,the CWU and the BT pensioners Federation quite honestly beggars belief.

cvd

Mr Moonraker.

I am sorry nobody has responded to your very first post on this forum.

I may be talking a load of rubbish

No, you are not talking rubbish, unlike many of the frequent posters here who frequently say things which are factually wrong.- which is why I rarely post here.

Even if it had been known that benefits were to be uprated with CPI, it was still sensible for members to be in the main scheme because of the substantial employer contributions. However, you paid in extra and these extra contributions would attract no additional employer contribution. If you had known at the time that beneifts would go up with CPI, then it is possible you could have have obtained a better deal elsewhere - especially if you are entitled to an enhanced annuity (because of postcode or a medical condition) and have no dependants. Your "once in a lifetime" decision was based on the assumption that benefits would go up with RPI and you have been misled. Please complain vigorously and always highlight the distinction I have just made between "standard" contributions to the pension scheme which attract employer support and extra contributions that attract no employer support.


It is in everyone's interest that you win your case - otherwise the terms of many other financial contracts could be altered by some small print rule.

The issue of commutation factors is an even more difficult problem. The commutation factors have been calculated by actuaries on the basis that benefits go up wth RPI. Actuaries will have to calculate new commutation factors for all these schemes to allow for the fact that benefits now go up with CPI. But people had to make a "once in a lifetime" choice between pension and lump sum using the information given to them at the time they retired - information which has now proved to be misleading.
Anyone who has chosen pension over lump sum will lose out compared with those who chose lump sum over pension.

Ripoff_2

ALL, If you get a reply back from your MP that says "CPI is a better measure of inflation for pensioners" or something on that vain, then ask your MP to prove the statement please. Ask him to supply written proof from the Professional bodies, to back up his claim. It will be interesting to see what proof he can supply because I can not find any literature anywhere that backs up that claim. With CPI in it's present form even the Office of National Statistics would not be able to agree to that statement and the RSS (Royal Statistical Society) certainly does not. I quote "CPI is good as a macro-economic indicator and for comparison between countries, but it is not suitable as it is to be used for wages and pensions" said at a meeting to Steve Webb on the 23rd November 2010 by Jill Leyland from the RSS

Mr_Moonraker

cvd wrote: »

Mr Moonraker.

I am sorry nobody has responded to your very first post on this forum.

.

CVD - Thanks very much for your comprehensive reply, your comments are very useful.