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BT talking to pensioners about caps on benefits -Telegraph
By Reuters
Published: 23:14, 26 May 2017 | Updated: 23:14, 26 May 2017 LONDON, May 26 (Reuters) -

Britain's biggest telecoms group BT Group Plc has begun informal talks with representatives of its retired staff about a plan to cap their pensions and ease one of the biggest challenges facing the company, the Daily Telegraph newspaper reported on Friday.

BT is asking the fund's trustees and telecoms unions to agree to end accruals in the company's defined-benefits pension scheme, a move some other British blue-chip firms have already taken, the newspaper said.
The change could trigger a hefty one-off charge but would help BT make investments needed for growth, it said.
BT's pension deficit was valued at 9.2 billion pounds ($11.8 billion) net of tax at the end of 2016.

A BT spokesman said the company was considering a number of options for the pension fund deficit but declined to comment further.
BT said in an annual report, published on Thursday, that one alternative to only cash payments could involve giving the pension fund a prior claim over some assets.
($1 = 0.7816 pounds) (Reporting by William Schomberg and Paul Sandle; Editing by Lisa Shumaker)

Read more: http://www.dailymail.co.uk/wires/reuters/article-4546652/BT-talking-pensioners-caps-benefits-Telegraph.html#ixzz4m4lcUfZa                                               

Comment:

This article raises many questions but provides no answers. It seem quite clear though, that as pensioners we will be worse off, the extent of which is not known and therefore is a cause for concern. Are BT trying to wriggle out of their responsibilities by making its pensioners pay towards the deficit by placing a cap on our benefits.?We already know that there is a large deficit in the BT Pension Fund but surely it is the Company's responsibility to plug the hole.

 

Who are these representatives of BTs retired staff and are they truly representative of us pensioners.?

What exactly does 'agree to end accruals' mean? Does it mean no more inflation linked increases? bearing in mind that they have already reduced such increases by unilaterally adopting the the CPI measure of inflation instead of RPI.

 

Once the Media get a whiff of such talks and negotiations, BT and the Fund Trustees must be more open about these proposals and explain them more clearly rather than use the media to drip feed information.

 

Why not express your Concern and ask questions by writing to BT Pension Scheme Trustees Limited, One America Square, 17 Crosswall, London, EC3N 2LB

 

See also another threat to pensions by MP's of all people, reported previously in the Daily Mail article dated 23 July 2016

                                                                                                                                                             Posted 09 July 17

 

BT Pensions Voluntary Increase Offer(PIE) Calculator

 

Based around the Offer made to a member, a BT pensioner has developed a Spreadsheet Calculator. Offer figures can be entered, to create an output showing total and actual pension figures at various ages for whatever CPI rate you choose.  The Spreadsheet file is Password protected and opening and using the spreadsheet will signify your acceptance of Conditions of Use and get Password 

Then Click  Spreadsheet 

 If you do use the Calculator please let me have your comments on its usefulness, Accuracy etc. 

 

This Offer may now be Time expired but these details will remain as historical information

 

News and Issues

 

BT pension Scheme Funding - Summary Funding Statement  As at 30 June 2016 

Click here to view in pdf Format    Posted 6 July 2017

 

The Trustee Newsletter 2017

The Trustee Newsletter 2017 has now been posted out to BT Pensioners and a copy in PDF format has been placed on this website Click Here to View. The Newsletter mentions a discretionary lump sum that maybe payable on the death of a pensioner and to benefit it is necessary to complete, sign and return it to BT Pensions, an Expression of Wish Form(EOW) also see below. A copy of this form is at the end of the news letter and can also be viewed Here and copied.                Posted 23 February 2017

 

Expression of Wish Form(EOW):

This is to assist the Trustee in making the lump sum benefit payment when a pensionere dies. It is mentioned in the Trustee News letter 2017 and emphasises the need to complete the EOW form. So I sent off an EOW but  what is doesn't say is that in the event of death it is only payable before starting to draw a pension and in the first five years of drawing a pension.                                 Posted 12 March 2017

 

Proposed Private Sector Pensions Reform

 

Do you think that your Spouses Pension is Absolutely Safe?

Well go to Daily Mail Article on Private Sector Pension Reform and Think Again!   Posted 26 July 2016

                                                                                                                                                                                                   

Single Tier State Pension and GMP

 

Following correspondence with BT Pension Trustees, a member has written to me to highlight the impact of the Single Tier State Pension changes on the BT Pension. The GMP element within a BT Pension can be a substantial part of the total BT pension, so the loss of all inflation indexing on the GMP component could represent a serious reduction in pension benefit for some BT pensioners over say, 20 years after reaching State Pension age. I regret that I cannot enter into discussion or correspondence on this matter but you can see the letter from the Trustees. Here

 

No Pension Increase in April 2016

BTPS have recently issued the BTPS Payslip Guide and it states the CPI Index at Sepember 2015  was -0.1% and therefore no pension increase or reduction at April 2016.

The RPI measure of inflation at September 2015 was +0.8% so if BTPS had not dumped the RPI measure in favour of the CPI measure we could have expected a 0.8% increase in our pensions. see the guide

 

 

DOES MY PARTNER HAVE ANY ENTITLEMENT, ON MY DEATH, TO MY PENSION?

I was recently advised of the death of a BT pensioner by his Partner of 43 years and it caused me enquire if she would be entitled to a spouses pension or an equivalent. The answer is probably Yes! but subject to their living and financial arrangements and the Trustees  discretion and decision. See answer to my enquirybelow.

 

However it seems that it could be sorted out before death whereby an unmarried member may, at no additional cost, nominate a dependant adult to receive the pension which would otherwise have been paid to a widow(er).This facility is available to Section A, B and C members of BTPS. See link below to the Adult Dependents Pension (ADP) Booklet

 

"Thank you for your recent enquiry you put through to Peopleline regarding beneficiary pensions..

If a member does not have any legal spouse then an Adult dependents pension may be payable and at the same rate as a spouse pension. The Adults Dependent Pension (ADP) is not automatically guaranteed and is only paid upon the Trustees discretion and decision. In the event of a members death the Trustees will assess the circumstances based on the guidelines as laid out in the ADP booklet. The nomination form does not guarantee payment but it does inform the Trustees of a members wishes.

Dependant for this purpose means anyone who, in the opinion of the Trustee was wholly or partly financially dependent on, or interdependent with, the member. (The Trustee will require documentary evidence of dependency such as joint account bank statements, mortgage documentation in joint names or utility bills for the deceased’s main address.)

Financial dependency (or interdependency) means a sharing of day-to-day living expenses to a significant extent, so that the loss of the deceased’s contribution has resulted in, or will result in, a material reduction in the standard of living of the dependant.

Adult Dependent Pension Booklet in PDF format

An Adult Dependant Pension may be payable but only at the absolute discretion of the Trustees and this pension will be payable for life and the same rate as a spouse pension.

A spouse pension and an adult dependant’s pension cannot both be paid and the legal spouse will always take precedence, therefore any nomination will be subsequently cancelled should the member marry."

 

Please tell me mailto:wm.rees@icloud.comif this has been helpful. Posted by Bill Rees Sept 2105
 

A warning about your BT Pension. By Trevor Conway Facebook group BT Past & Present 27 July 2015
I currently receive a BT Pension and in June I receive, from Pensions branch, an attestation form which basically requires you to prove who you are and that you are still entitled to receive a pension. The warning on the form was "YOUR PENSION MAY BE SUSPENDED IF YOU DO NOT COMPLETE AND RETURN THIS FORM" or words to that effect. I duly completed and returned the form in the pre-paid envelope. Getting near the end of the month and since they hadn't contacted me I rang the pensions group to make sure the form had been received and my pension wouldn't be suspended. The form had of course gone missing and to cut a long story short, after receiving that months payment, my pension was suspended. I have since completed a new attestation form and confirmed by telephone that it has been received and my pension reinstated so I'm hopeful it will be paid this month. It's worth noting that BT Pension (Accenture) at no point keep me informed and if I hadn't of rang my pension may not have been paid. The moral of the story is follow up any requests from Pensions Branch and send letters or forms back to them via recorded delivery.

 

Pension Increase April 2015

We should soon receive our pension payment for April, so what will the increase be? The CPI measure of inflation for year to September 2014 was 1.2% compared to the RPI of 2.3%. BT pensions were always increased using the RPI Figure but this changed in about 2010 when the UK Government decreed that the CPI index would replace the RPI index for Public Sector Pensions.

BT Pensions Trustees saw this as a great opportunity to minimise the pension fund deficit. In effect us pensioners helping to pay off the deficit.

So we should all be getting an increase of 1.2% but not on the full amount our pension because of the incomprehensible Guaranteed Minimum Pension (GMP) Rule. Having had a little whinge! I say a "thank you every" month when I get that injection of cash into my bank account.

Click Here for a BTPS explanation of the effect of GMP on Pension Increases.

 

A member has emailed me with his explanation of GMP which may be useful to other members, see below.

 

" I find that trying to work out the increase in my BT pension from the example given by the BT Pension Group is incomprehensible. I have my own system which is very easy. You will need your new tax years Pensions notification from the Department for Work and Pensions and also last years. For simplicity I will use nice round figures.

Suppose your pension is £20000 per annum and the CPI is 2%. This means that your pension increase is £400. Now look at the letters from the DWP regarding the COD (contracted out deduction) for Serps. Suppose this was £78 last year and is £80 this year, that makes a difference of £2 per week. Multiply this by 52 for weeks in the year making a total of £104. Deduct this from your new total pension of £20400 (£20000 + £400) which is £20400 less £104 = £20296. Therefore £20296 will be paid by BT and the remaining £104 paid with your Old Age Pension. In fact if you had some service after 1998 you could get slightly more than £20296 paid directly by the BT Pension Group due to some change in the Serps rules in 1998. All this of course is only for people in receipt of the Old Age Pension. If you have yet to receive this the whole of your increase will be paid by the BT Pension Group."
Posted by Frank Allen previously of Sales Division West Midlands 19 April 2015

 

A reader of this website has emailed me recently to tell me about a little known issue with Increases in the GMP related to the new Single Pensions that come into effect from 6 April 2016. In fact, increases to GMP will not be paid. to those who retire after 06 April 2016 It seems that those affected have not yet been informed by DWP/Government, or the Pension funds including BT Pensions.Click Here For more details

This information is shown to flag up issues which may arise and this  Website or its Owner accepts no responsibility for the consequences of using this information and we expressly exclude liability for any inaccuracies or errors to the fullest extent permitted by law. Users of this information are recommended to carry out their own research to satisfy themselves of the facts.

 

Your Trustee Newsletter For Pensioners 2014

This Newsletter has recently been sent to pensioners and includes

  • Welcome message from the Trustee Chairman

  • Keeping  your Information up to date

  • The Scheme's Funding Statement

  • Financial Summary

  • News Round-up

  • Keeping in touch with the Pension Scheme

 If you have mislaid or discarded your personal copy of the News letter it has been reproduced in PDF format and is Available Here

 

BT Press Release 30 January 2015 - Result of Pension Funding and Valuation

The funding deficit at June 2014 was £7.0Billion

BT agrees to a 16 year recovery plan.

£2.0bn will be paid in over the next 3 years.

To read the press release in full Click herehttp://www.btplc.com/News/Articles/ShowArticle.cfm?ArticleID=B7BD6FCA-B49D-4ABD-A888-CD3221222E8B

 

 

Crown Guarantee of BT Pensions Upheld by Court of Appeal

 

It was reported in the TImes Newspaper that the government has lost a long-running court battle to walk away from any responsibility for the company pensions of BT workers who joined the scheme after the telecoms giant was privatised in 1984.

The Court of Appeal ruled yesterday that the so-called crown guarantee, issued to BT at the time of privatisation, covered almost all staff hired since then.

John Ralfe, a pensions expert, said: "This ruling confirms that if BT were ever to go bust, taxpayers are on the hook to continue to pay BT’s pensions. The present value of these payments is a whopping £24 billion."

Mr Ralfe has calculated that only 7,000, or 2 per cent of the scheme’s 344,000 members, are excluded from the crown guarantee because they were employed by participating companies.

BT has the UK’s largest private sector defined benefit scheme, which traditionally offers more generous retirement plans than the modern defined contribution pensions.

Mr Ralfe estimates that the BT scheme has assets valued at £40 billion against predicted liabilities of £64 billion. The pension scheme had a deficit of £5.6 billion at the last valuation in March this year.

However, in the same judgment the court upheld an appeal by the government on the basis of which any future liability to the BT scheme would be carried out. The taxpayer will no longer need to pay for the scheme as a whole should the FTSE 100 telecoms group go into administration. Instead it will have an obligation to pay deficit contributions similar to BT’s own.

Paul Spencer, chairman of BT’s pension trustees, said in a statement: "It is important to remember that the crown guarantee is only relevant in the highly remote circumstances that BT was to become insolvent. The scheme continues to have strong ongoing support from BT in relation to the scheme and its members."

The department for culture, media and sport had no immediate comment on whether it would appeal the case to the Supreme Court. "We are studying the judgment," a spokesman said.

2014 © 2014 Times Newspapers Ltd. All rights reserved Posted 23 July 2014

 

BT Pension Scheme Agrees Deal to Protect it Against Longevity

 

Dow Jones Institutional News, Friday July 4th, 2014Copyright 2014, Dow Jones & Company, Inc.

LONDON--BT Group PLC (BT.A.LN) said Friday its pension scheme trustee has agreed a deal to protect it against its members living longer than currently expected. Under the deal, the scheme's exposure to longevity risk will be transferred to a new insurance subsidiary, which will be reinsured with The Prudential Insurance Company of America, a U.S. based life insurance company.

The arrangement covers over 25% of pension scheme's total exposure to improvements in longevity, covering about 16 billion pounds of its liabilities at October 2013, the pension scheme said.

These arrangements will not require additional contributions to be made by BT Group.

Write to Ian Walker at ian.walker@wsj.com (END) Dow Jones Newswires

 

Cost of Transferring BT Pension Abroad

A BT Member Stan Forbes, living in Australia has written about Bank charges applied every month when his BT pension is transferred to Australia.His email is copied below and he would like to hear from anyone who has similar experiences  

 

Hello Bill,

I am ex bt having worked in a various branches within the Edinburgh Telephone Area for nineteen and a half years before emigrating to Australia in 1981.

I have been in receipt of a pension from Bt and a UK DHSS pension for a number of years having retired from the work force in 1997.

At the moment Bt have an arrangement with the Royal Bank of Scotland for which I am being charged three pounds fifty pence once a month by RBS to transfer my pension into my Australian bank account.

I am also in receipt of a UK DHSS pension which is transferred once a month by UK DHSS via Citibank Europe into my Australian bank account, Citibank do not charge for this transfer.

I have not approached Bt about this unjust anomaly yet, I thought I would like to hear from any other ex Bt workers who find themselves in similar circumstances, support for change being influenced by numbers.

I would appreciate very much if you can publish these details so that any interested parties can communicate with me on the subject, I know of no other ex Bt employees in Australia who I could contact.

Kind regards Stan

contact forbes.stan2@gmail.com  Posted 2014

NB. Another Member Brian Williams, now living in South Africa has raised this issue and has some strong views on the matter. Brian would like anyone who suffers the same problem to contact him Brian Williams <livebrian@gmail.com> see also some of his correspondence with this Website - Here

 

A Success Stor

A BT Retiree, David Wyatt writes from N. Zealand to BT Pensioners Reconnect….. I'm hoping that you are able to assist me I worked at BT for approx 17 yrs and emigrated in 1982.

Over the years I have lost contact and receive no updates from BT Pension scheme .... the only email address that I had for contacting them was : peopleline.hrservices@accenture.com> I have forwarded a number of emails but receive no response

 I wish to notify them of my change of address in New Zealand, and also request a statement of the value my benefits.

 It would be appreciated if you would acknowledge receipt of this email and advise of how to contact the BT Pension scheme.

 

BT Pensioners Reconnect passed on the enquiry to Accenture and …… The retiree has confirmed that he has received a response from the Accenture team who have advised that he was due to draw his pension at Age 60 and he is now hoping to receive his entitlement for the past two years.

Note: The above Email address is incorrect, this is correct peopleline.pensions@accenture.com   

New Voluntary Pensions Increase Option. (PIE)

Some of our Pensioners have received letters from Kevin Boyle Head of BT Pensions about a "New Voluntary Pensions Increase Option." The letter doesn't tell us anything except that you will get further information. The result, judging by enquiries I have received, has been to cause un-necessary concern and perhaps a little panic. The advice I have given is simply to put it out of mind until more details are available and that what ever is offered it is Optional so one can opt for no change. 

This Pensions increase Option is Also referred to elsewhere as "Pensions Increase Exchange"(PIE) and by doing an internet search for Pensions Increase Exchange more information can be found.   

Posted 26 May 13

See Daily Telegraph Comment click on  link below: http://www.telegraph.co.uk/finance/personalfinance/pensions/10095284/Should-you-turn-down-a-30pc-pension-rise.html

Publicising BT Pensioners Reconnect

The BT Pension Scheme Trustees were approached by letter seeking their help to publicise this Website  through  their correspondence with BT pensioners and or by links and references in the BT Pension Scheme Website. The Pension Scheme is the one organisation that has records of and access to, all BT pensioners and as such it is uniquely placed to help promote a useful service to its pensioners and at virtually no cost.  

The Website is quite clearly a service that pensioners want and I felt sure that the Scheme would  understand what the site sets out  to achieve, and that they would be very willing to help, as it is very much in the interests of its members. However they have declined to help in any way. 

I am of course, deeply disappointed particularly as they cite no reason for their decision, other than to use the time honoured, weak and meaningless excuse "that it is not their policy....!".  Click to View Correspondence

Pension Increase 2013 Member's Enquiry  See details

Pensions Increase 2013 - Observations
This is the time of year when we are informed of the BT pension increase for 2013/14. My notice of increase arrived 24 April and as expected the increase was 2.2% based on the September 2012 CPI measure of inflation.
This compares with:
The RPI measure of inflation of 2.6%
The State Pension Increase for 2013/14 of 2.6%
Cable & Wireless Pension Scheme increase of 3.1%.
.Read More

Click Here for a BTPS explanation of the effect of GMP on Pension Increases.

RPI or CPI

Are we being let down by BT and the Pension Scheme Trustees or both? 

BT Pension Scheme Trustees have not made a convincing case, in fact no case whatsoever,  for the legality of adopting the CPI instead of the RPI.  The trustees have not detailed the specific Scheme Rules which they say allows them to change what we all believed was  contractual and legally binding. A Minister is reported as saying that there is no intention to make private pension schemes conform to the change to CPI measure.

  It is my belief that it is convenient and financially attractive to The Pension Scheme (The Trustees,) to BT, and in particular to BT Shareholders, in fact it will reduce the BT pension fund deficit by £2.5 Billion (and that effectively comes out of your  pension) and reduces BT’s liability to the Pension Fund. The deficit is the responsibility of the Trustees and BT. It is not the responsibility of Schemes pensioners to fund the deficit

Note how the BT share price increased following the announcement and in due course note how the dividend improves.

RPI/CPI Court of Appeal Decision

1.    The Judicial Review:

Various public service unions and interest groups challenged (by judicial review) the Government's decision to use the Consumer Prices Index (CPI) in place of the Retail Prices Index (RPI) as the index for determining pension increases for public sector schemes. The judgment in this judicial review was handed down on 2 December 2011.  In summary, the court rejected the unions’ challenge and found that the Government had not acted unlawfully in making this change.  An appeal against this judgement was then made.

2.    House of Commons Debate on the Issue:

The RPI/CPI e-petition attracted more than 100,000 signatures but when the issue was debated in the House of Commons on 1st March it was lost by 232 votes to 33.

3.    The Appeal:

On 20th March, the Court of Appeal handed down its judgement on the appeal against the outcome of the judicial review. The final appeal has been defeated.
It will now be considered whether there is any possibility for a further appeal to the Supreme Court.

Comment:

All of the above proceedings seem to show that the Government, since it is responsible for Pension payments, can legally decide how Public Sector pension increases  will be calculated.

Reading the Court of Appeal Judgement, my impression was that the main considerations were, which of the two indices RPI or CPI, was most representative of actual inflation and which was most suitable for Treasury purposes. The effect of the switch to CPI on pensioners pensions did not seem to be a consideration.

I came to the conclusion that neither of the two indices were a good measure for Inflation related to pensioners purchases but can’t see that a Pensioners Purchases Index (PPI) would ever be considered.

  The three processes 1; 2 & 3 above all apply to Public Sector Pensions and have nothing to do with BT pensions, although had they been successful, it would have provided a platform to attack the BT Pension Scheme. So I believe that the issue of BTPS adopting the CPI measure of inflation should still be challenged.

Who will take up that challenge? Logically it should be the Unions representing BT employees. The CWU has already expressed it's intention to Challenge BT and the BTPS on the RPI/CPI issue -See http://www.cwu.org/defending-bt-pensions.html 

Posted 26 March 2012

 

Click on  links below to see what various commentators and politicians have said

12M Private Pensions Could be Slashed As Inflation Link as Axed Daily Mail 08 Dec 2010.doc

Private pensions to be slashed by 25%: Rule changes 'could hit 12million'

Companies denied power to switch pension schemes to less generous CPI

The Private Occupational Pensions Rip Off

A number of small shareholders, who are also former employees and Tony Cox, former Public Affairs director at Openreach, will challenge BT at it's AGM.- Daily Telegraph on line 29 July 2011

 

Other Organisations Resisting the Imposition of RPI

www.seniorsnetwork.co.uk/newsletter/

http://epetitions.direct.gov.uk/petitions/1535

National Federation of Occupational Pensions: www.nfop.org.uk/

 

Pensions Increase 2013  - Observations

This is the time of year when we are informed of the BT pension increase for 2013/14. My notice of increase arrived 24 April and as expected the increase was 2.2% based on the September 2012 CPI measure of inflation.

  This compares with

  • The RPI measure of inflation of 2.6
  • the State Pension Increase for 2013/14 of 2.6%
  • Cable & Wireless Pension Scheme increase of 3.1%

  We all know that our BT Pension was increased by the RPI Measure until 2011, when it was changed to CPI, which is generally lower than RPI.  This change means that in the 2012/13 increase BT pensioners lost out by 0.4% and by 0.4% for 2013/4. This may not seem very much but because of compounded percentages, it has been estimated that a BT pensioner over a period of 20 years could loose around £40K, but the Pension fund and by association BT, will save over £2Billion.

This change to rules was determined by the Trustees probably under pressure from BT Board. It was not mandatory on the Trustees to follow the Government’s lead to adopt the CPI measure. The trustees however make it appear that they had no option but to follow the Government policy.

In our notice of increase they use a Phrase “pension currently increases every April in the way that public sector pensions are increased by the Government.” In fact, BT pensions are increased in the way that BT Trustees have decreed! Which follows what happens in the public sector.

  British Airways (BA) like BT/POT, was once government owned but their pension scheme has not adopted the CPI measure.

  There is nothing we can do about it because it has been unsuccessfully challenged in the courts, but  we can whinge about it and I think we should know the truth of the situation.  In the final analysis I am grateful for my pension and whatever increases I get.

Click Here for Pension Scheme explanation of the GMP effect on Pension Increases (pdf File)

Pension Scheme Enquiries

Peopleline are open between 8.30am and 5.00pm, Monday to Friday. If you are calling from

within the UK, please telephone 0800 731 4747 if you are a BT employee, or 0800 731 1919 if you

are no longer employed by BT.

If you would rather put your enquiry in writing, please write to:

BT Pension Services

Accenture HR Services Limited

Venture House, Venture Way

Chesterfield S41 8NR.

Or by Email  peopleline.pensions@accenture.com  

Pension Tracing Service

Information about the Scheme (including a contact address) has been provided to the Pension Tracing Service as required by law. Because the Pension Tracing Service holds the same information for other pension schemes, it offers a service which enables members to trace benefits from previous employers’ schemes. The Pension Tracing Service can be contacted at the following address:

Pension Tracing Service

Mail Handling Site A

Wolverhampton
WV98 1LU

 

                              

 

 

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 mailto:wm.rees@icloud.com with questions, information or comments about this web site.
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