Union Members Urged to Reject BT Pension Proposals

Communication Workers Union says a major industrial relations showdown looks inevitable.

The Communication Workers Union (CWU) has told its members they should reject telecommunications giant BT’s pension proposals. 

The union said that BT’s proposals to change benefits for participants of the BT Pension Scheme (BTPS) were a “slap in the face to loyal employees.” The union said that both BTPS and the BT Retirement Saving Scheme (BTRSS) members are affected by different proposals that the union says, “totally fail to grasp the importance hard-working employees place on decent pension provision in retirement.”

The CWU said it is urging members of both BTPS and BTRSS “to say no” to all of BT’s proposals. The BTPS is the company’s defined benefit pension plan, and the BT Retirement Saving Scheme is the company’s defined contribution pension plan.

The CWU objects to BT’s proposal to close the BTPS for future service accrual from April 1, 2018, increase member contributions by up to 3% of salary, and remove the current National Insurance rebate, which it said would cost members another 1%.

“BT is hoping that faced with the option of closure, members will accept these radical changes and embrace significant cuts in their future pension,” said Andy Kerr, CWU’s deputy general secretary. “There is no way this is acceptable or fair.”

CWU said it is convinced that “only an overwhelming expression of employee anger at the company’s current proposals will provide the impetus required for a meaningful company rethink,” adding that “a major industrial relations showdown looks inevitable.”

The union said BT’s proposals would have a “dramatic impact” on pensions beginning in April 2018, and would be “particularly detrimental” to those under the age of 50. It also said that the benefits built up every year from April 2018 would be 12.5% less than what it would be under the current pension arrangement, and would build up at only 120th of members’ pensionable salary each year, which the union says is the legal minimum.

CWU also balked at BT’s proposal to introduce a cap on the amount that pay can increase for pension purposes at a maximum of CPI inflation each year. The union said that over the past 10 years, pay rises at BT have consistently been higher than CPI.

“Assuming average pay rises of 1% above CPI means that in the next decade around 10% of your salary would not count towards your pension,” CWU said in a bulletin to its members.

The union said it wants BT to contribute twice as much to the pensions as members do, and claims this would cost about 0.2% of BT’s 2016-17 profits.

“The changes proposed by BT would make the BTPS almost unrecognizable” said the CWU. “They are designed to make the BTPS look comparable to the BTRSS, but fail to take into account your pension expectations. BT can afford more.”

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