BT is planning to overhaul its defined benefit (DB) pension scheme after its deficits rose by an estimated £5bn this year to approximately £16bn, as well as review its defined contribution plan.
The telecoms group is considering raising the retirement age from 60 to 65 years, increasing employee contributions and switching to a calculation based on a career average rather than final salary. It is currently in consultation with the organisation’s trades unions and scheme’s trustees.
The DB scheme, which closed to new members in April 2001, is the largest company pension scheme in the UK and 75% of the fund is covered by government guarantee. It has a total of 332,000 members, with 67,000 actives, 178,000 pensioners and 97,000 deferred members.
The firm’s defined contribution scheme, meanwhile, has 20,00 members.
A spokesman for BT said: “We have been talking to the trustees and the unions for some months to make sure that our pension schemes are sustainable for the long term. We have no intention of closing any of our pension schemes. In fact this review is taking place in order to protect the schemes and its members. No final decision will be taken without further consultation with the unions and the trustees”