High Court rules BT cannot change index used to calculate future pension increases


The High Court has ruled that telecommunications organisation BT cannot change the index it uses to calculate pension increases for its defined benefit (DB) scheme.

BT went to the High Court in December 2017 to seek a decision on whether it could change the index it uses to calculate pension increases paid in the future to section C members of the BT Pension Scheme (BTPS) from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI).

The CPI is currently used to calculate pension increases for BTPS members who are within sections A and B of the DB scheme.

The High Court confirmed on 19 January 2018 that BT could not make this change.

As at 31 March 2017, the BTPS has 21,000 active members, 38,500 deferred members and 23,500 pensioners included within its section C member population. The BTPS has 296,000 members in total.

In a statement BT said: “We are disappointed with the decision and will now consider the judgement in detail in order to decide next steps, including the possibility of an appeal. The relevant index for pension increases for members in sections A and B of the BTPS remains unchanged as the [CPI].

“We continue to review the future pension benefits under our main defined benefit and defined contribution schemes in the UK, with the objective of providing fair, flexible and affordable pensions. We have just completed a consultation with our affected employees and are now considering their feedback before concluding the review.”

Philippa Childs, national officer at trade union Prospect, added: “Prospect has consistently campaigned against changing indexation of pension schemes from RPI to CPI, because CPI is normally around 1% lower than RPI.

“The outcome of this case is welcome [because] this action has caused anxiety among active and deferred members and pensioners. However, BT has told members of the scheme that it will be considering next steps after the ruling including the possibility of an appeal. Prospect will be closely monitoring the actions of BT to ensure that our members views are heard and taken into account.”