A stark warning has been issued to BT that the Communication Workers Union (CWU) will defend members’ pensions in the wake of the company’s unwelcome but widely anticipated decision to trigger a review of the BT Pension Scheme (BTPS).
Tens of thousands of BTPS members across the country were contacted yesterday (20 July) and formally notified of the forthcoming review, the rationale for which was briefed to CWU branch reps by BT’s head of employee relations, Tom Keeney, at a specially convened CWU branch forum on Wednesday (19 July).
CWU reps left the company in no doubt as to their anger and dismay at the move – reinforcing the warnings already issued by national negotiators that any unilateral attempt to close the scheme to future service accrual will be opposed “by all means including industrial action.”
The BTPS is a defined benefit pension scheme with more than 300,000 members, and although the scheme had been closed to new entrants in 2001, existing members continue to build up benefits.
The scheme’s triennial valuation is due later this year which is expected to show that the BTPS deficit – the shortfall between the BTPS assets and the expected cost of providing benefits already promised to members – will to grow to £13.9bn up from around £10bn in 2015.
Despite BT making top-up payments totalling £6.2bn since 2009, the continuing expansion of the deficit has been caused in large part by the current prolonged period of historically low interest rates – though rising life expectancy, above inflation pay rises during much of the period in question and increased regulatory pressures.
Yet despite a detailed presentation by management on the problems presented by the BTPS deficit – summarised in the communication received by all BTPS members yesterday – branches delivered the clearest possible message to the BT management that members are prepared to fight, if necessary, to secure a fair and just pensions settlement from the forthcoming review.
The union’s deputy general secretary Andy Kerr said: “While this review is clearly unwelcome and unsettling for BTPS members, it’s incumbent on the CWU to enter constructive discussions with the company, because ultimately it’s crucial we ensure the long-term sustainability of our members’ pensions.
“We shouldn’t lose sight of the fact, however, that this review does present an opportunity for the CWU to seek to address the significant shortcomings of the BTRSS (the money purchase scheme) – of which around half of BT’s current UK workforce are members.
“Regarding the BTPS, the company has placed a number of options on the table. These range from the wholly unacceptable closure of the BTPS to future accrual, with in-service members switching to the BTRSS – all the way through to potential adjustments that could be made to the 2008 agreement, which can be modified by mutual consent.”