Cash-strapped telecoms giant BT (BT.A) has reached an agreement with the Communication Workers Union (CWU) which will allow it to close its defined-benefit pension scheme this summer. The 20,000 union members will be transferred onto a new hybrid scheme, which combines elements of the defined-benefit BT Pension Scheme and defined-contribution BT Retirement Savings Scheme.
BT’s initial proposals to transfer all workers into the Retirement Savings scheme alongside 10,000 managers who are under the protection of the Prospect union, fiercely rejected these proposals and BT has had to offer a series of sweeteners to get the union on its side. It will make additional payments to those transferring to the defined-contribution scheme and will offer a higher maximum contribution rate of 11 per cent on a temporary basis.
