BT Pension Index Linking

chris_m

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.

I've just been having a look at this, in view of todays news that HMG does not intend to either force company schemes to adopt the RPI/CPI change nor to legislate to make it easier for schemes to do so where their own rules do not already allow it;

http://www.bbc.co.uk/news/business-11948861

According to a letter I received recently, Sections A & B increases are specifically linked to HMG's Pensions Increase Orders - which means that they are legally required to use the increase specified by HMG, i.e. CPI if the proposals go through. Neither BT nor the pension scheme Trustees have any say in this.

However, Section C is not linked to the Increase Orders so is governed by the scheme rules. These refer to "the General (All Items) Index of Retail Prices" which I assume is what has become generally known as RPI. However they go on to say that "or if this ceases to be published or becomes inappropriate, such other measure as the Principle Company, in consultation with the Trustees, decides."
I guess the issue is on whether BT & the Trustees can deem RPI to have become "inappropriate" - that is what I think they are currently seeking legal guidance on.

In the BBC article it mentions "The government also said it intended to make it compulsory for employers to consult their staff if they wanted to change their method of inflation uprating."

I think (hope) that means that if they do want to change to CPI for Section C members then they'll have to ballot those members. No consolation for section A/B members, I'm afraid.

mjm3346

chris_m wrote: »

In the BBC article it mentions "The government also said it intended to make it compulsory for employers to consult their staff if they wanted to change their method of inflation uprating."

I think (hope) that means that if they do want to change to CPI for Section C members then they'll have to ballot those members. No consolation for section A/B members, I'm afraid.

Making it a requirement to consult staff if they want to change to cpi is about as useful as giving people the right to ask for flexible working. They consult, members don't like it, business case is to make the change so the change is made. Would be a different thing if they were obliged to accept the result of any consultation.

Haybob

I read all the posts with interest since I have 3 pensions a Local Government Pension, a NHS pension and a BT pension. All 3 pensions are affected by Steve's Steal. There are many thousands of affected pensioners with their representatives seeking some redress ranging from Armed Forces, Police, Teachers etc etc. Surerly it is now time to stop pleading special cases but combine and unite behind an orchestrated protest against this injustice, there are thousands and thousands waiting to be led against this steal.

Ripoff_2

Haybob wrote: »

I read all the posts with interest since I have 3 pensions a Local Government Pension, a NHS pension and a BT pension. All 3 pensions are affected by Steve's Steal. There are many thousands of affected pensioners with their representatives seeking some redress ranging from Armed Forces, Police, Teachers etc etc. Surerly it is now time to stop pleading special cases but combine and unite behind an orchestrated protest against this injustice, there are thousands and thousands waiting to be led against this steal.

There will be a tipping point but I don't think we have reached it yet, to make you more angry read this.

BT Private pension scheme or similar schemes (ExPublic Sectors) and ALL Private DB schemes not linked specifically to RPI.

At the following location on the DWP web site there are two documents 1) Consultation 2) Impact Assessment
Dwp.gov.uk/consultations/2010/cpi-private-pens-consultation.shtml (copy and paste into IE)

If you are in any doubt whether what has been said on this subject on this forum I suggest you read the Impact Assessment document page 2. I quote

COSTS: Main Affected groups: COST Best estimate £76.6 billion
"The main cost of this policy is to members of private sector DB pension schemes who will see the anticipated value of their pension rights reduced and the value of their total remuneration package reduced in the short term".
(Note: Short Term is 15 years)
BENEFITS: Main affected groups: BENEFIT Best Estimate £76.6 billion
"The main benefit of this policy is to sponsors of DB pension schemes who will see the value of their pension liabilities reduced and the cost of the total remuneration package for their employees reduced in the short term." (Note: Short term is 15 years)
Non-monetised Benefits:
"Some pension schemes may become more sustainable or affordable due to the reduction in pension scheme liabilities. The impact of company accounting standards will mean that the reduction in pension scheme liabilities is reported transparently and may have a beneficial impact on companies with substantial DB liabilities – for example improved credit ratings and ability to pay dividends."

So now we have the true reason in black and white, take the money from the pensioners of DB private schemes and give it to the employers so they can pay dividends to share holders and have a better credit rating. This is after many employers of DB private schemes had pension holidays, when the going was good and have changed their schemes to career average with reduced benefits, but now the pensioners will have to pay for shareholders and credit rating improvement to the tune of £76.6 billion.
This is aside to the public sector pensioners who will also be hit very hard. If you read the document fully you will see that the hardest hit are deferred members and existing employees. The reduction is –20% over time.
Steve Webb has signed off on this, so there is no doubt that he is fully aware that this policy is taking from the workers/pensioners and giving to the employers/shareholders.

BaldGringo

I have just looked out a copy of a BT Sections A&B Pension Booklet printed in 1993 which on page 19 clearly mentions RPI:

PENSION INCREASES

Pensions in paymen are reviewed and incresed in April each year.

Pensions in payment in excess of the Guaranteed Minimum Pension (GMP) are at present increased by the Scheme at a rate equal to the increase over the 12 months to September the previous year in the cost of living - as measured by the General Index of Retail Prices (RPI).

Haybob

My booklets and pamphlets say the same and you would expect to believe these official facts, but it seems there is nothing in the actual rules to prevent a change to CPI. All you can do is protest and encourage others to do the same since it is a betrayal of trust and many would not have voluntered for redundancy or bought added years if they had known what a Government could sneakily do.

Some NHS unions have considered mounting legal challenges, I believe all affected should unite in our thousands to place pressure to change this ripoff steal.

Stargazer57

BaldGringo wrote: »

I have just looked out a copy of a BT Sections A&B Pension Booklet printed in 1993 which on page 19 clearly mentions RPI:

PENSION INCREASES

Pensions in paymen are reviewed and incresed in April each year.

Pensions in payment in excess of the Guaranteed Minimum Pension (GMP) are at present increased by the Scheme at a rate equal to the increase over the 12 months to September the previous year in the cost of living - as measured by the General Index of Retail Prices (RPI).

Yep. I see the RPI. I also see the words "at present".

chris_m

If you want to see the actual scheme rules for all three sections, they are here; http://www.btpensions.net/btps/booklets/booklets_and_scheme_rules.htm

There is no mention of RPI nor CPI in the section A or B ones that I can see from a quick glance. The increases are all described as being in accordance with a couple of Acts - which I interpret as being tied to an uprating order issued by the government, the same order as covers the public sector pensions.

Note that the rules given on that site haven't been updated to include the changes that came in in April 2009, nor do the ones on the HR internal website - I looked last night.

In the meantime I have emailed HR to request a copy of the up-to-date rules because I do not believe that they still haven't been written, nearly two years after the members' vote to accept the changes and 19 months after they came into effect. If I don't get any joy, I think I'll try the trustees direct.

MEY_3

To "Stargazer 57" - "Yep. I see the RPI. I also see the words "at present". "

It may seem to be semantics but if you re-read "BaldGringo"'s quote from the scheme booklet, - "PENSION INCREASES

Pensions in payment are reviewed and incresed in April each year.

Pensions in payment in excess of the Guaranteed Minimum Pension (GMP) are at present increased by the Scheme at a rate equal to the increase over the 12 months to September the previous year in the cost of living - as measured by the General Index of Retail Prices (RPI)." , the sense of this doesn't suggest the "at present" applies to the RPI element. If it did there would be no need of a hyphen as without it, or with a comma instead, the sense would read as you interpret it. By using a hyphen to separate it from the body of the sentence the clear sense is that the "at present" refers only to the period counting for indexation, not the means of indexation.

RedTed

Just to reiterate that I have various documents regarding the use of RPI as the measure of increase, including the 1993 booklet and some subsequent literature including one specifically entitled 'Guide to the Pensions Increase'.
It is simply a money saving and positive accounting scam for BT's benefit.
The problem is that the lets just give up and wring our hands attitude of the Trustees and the unions means that BT will only face individual complaints, which is precisely what it wants.
It's really quite shameful and I speak as an ex CWU/BTUC latterly full time rep.
Only a class action will suffice but without support that is not going to happen, despite the fact that the entire basis of the argument is open to serious legal debate.