LTB 674/2018 – BT Pension Scheme: Section B Judicial Review of Guaranteed Minimum Pension Increases Refused
No.674/2018
29th November 2018
TO ALL BRANCHES WITH MEMBERS IN BT
Dear Colleague,
BT Pension Scheme: Section B Judicial Review of Guaranteed Minimum Pension Increases Refused
In May BT notified staff who are members of Section B of the BT Pension Scheme (BTPS) that it was seeking a judicial review of a Government decision on pension increases. Yesterday the Court refused the application for the review. BT is now considering whether or not to appeal.
The CWU did not support BT’s attempts reduce the levels of increase in Section B pensions. Therefore, we welcome the Court ruling, which will also come as a relief to BTPS members.
The challenge occurred because of a decision by the Treasury to protect certain pension increases for members of public sector pension schemes. Without that decision, public sector pension scheme members would have lost part of the increase on a proportion of their payments known as the Guaranteed Minimum Pension (GMP). The way in which the Treasury implemented these arrangements meant that they also applied to Section B of the BTPS as the Scheme still has some links to public sector pensions.
The Treasury previously announced protection for people reaching State Retirement Age (SPA) from April 2016 to 5 December 2018 and BT did not challenge these increases. However, the company tried to challenge the way the protection was extended to people reaching SPA between 6 December 2018 and 5 April 2021 arguing that the protections were unintended and alternative arrangements were not properly considered.
The issue could have impacted on 8,000 Section B members who reach SPA between 6 December 2018 and 5 April 2021. If BT’s action had succeeded, it would have reduced the benefits of this group by about £120 million in total. It is possible that younger members of Section B could have also been affected, depending on future Government decisions.
The GMP arrangements are separate to the other indexation arrangements for the BTPS pensions which are linked to CPI in Section B.
More background to this case is detailed in LTB 293/2018.
Yours sincerely,
Nigel Cotgrove
Assistant Secretary