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BTPS: Indexation Arrangemens

17 May 2011

It was announced in November 2010 that Sections A/B of the BT Pension Scheme (BTPS) would be increased in line with the Consumer Price Index rather than the Retail Price Index, BT has now confirmed the pension increases that apply for 2011.

The increases are as follows.

  • Pensions in Section A/B linked to the CPI in September each year will rise by 3.1% instead of 4.6% under the old formula.
  • In Section C, which still linked into the RPI in December each year, but capped at 5%, pensions in payment will rise by 4.8%.

These figures clearly demonstrate the adverse impact of the move to CPI for Section A/B members. These pensioners have already experienced an effective 1.5% cut in their pension. Moreover, member of Section A/B of the BTPS are now paying a higher contribution into the BTPS than their Section C counterparts, for a pension that is indexed to CPI instead of RPI.

These figures have reinforced the views of the Executive that BT must take steps to offset the impact of the changes in indexation. The Union will continue to press BT on this matter in all appropriate forums.

Separately, the CWU together with Prospect and the National Federation of Occupational Pensioners have taken legal advice on the BTPS Indexation change. At the current time we do not believe that there is the basis for a successful legal challenge to the change in arrangements particularly as they were based on the current rules of the BTPS. However, CWU Head Office will continue to keep this option under review.