Another courtroom defeat for BT on pensions

Telecoms & Financial Services, BT February 13 2020

BT’s latest attempt to reduce its pension by mounting a complex legal challenge has resulted in another courtroom defeat for the company.

Undeterred by its epic and ultimately futile  courtroom battle over indexation arrangements for  Section C  of the BT Pension Scheme (BTPS) – which only hit the buffers last July after years of legal wrangling in the High Court, the Court of Appeal and finally the Supreme Court – BT has just received another bloody nose from the Court of Appeal in a separate case.
Last November the company brought proceedings in the High Court challenging the validity of a decision taken by HM Treasury (HMT) about how benefits are increased in public sector schemes after its application for a judicial review of the Government’s decision was refused by the Divisional Court in November 2018.

BT argued there had been an “unintended” consequence of that decision as a result of the BTPS’s civil service roots – meaning that public sector pension increases would apply for Section B members of the BTPS who reach state pension age between December 6,  2018, and April 5 2021.

In an eerily familiar echo of the earlier indexation case – which centred round the company’s efforts to change indexation arrangements for Section C members of the BTPS from RPI to the typically lower CPI measure of inflation –  the High Court rejected BT’s arguments, though the company was subsequently granted permission to appeal the decision in the Court of Appeal.

That hearing took place in mid-December, and late last month the Court of Appeal handed down its judgement, once again rejecting BT’s appeal.

This means that BT will not now make savings of an estimated £270 million that would have accrued from a courtroom victory.

At the end of the earlier CPI/RPI indexation case the CWU “wholeheartedly welcomed” what it described as a “misguided, unnecessary and expensive case designed to cut members’ future benefits” – and that tone was echoed in the union’s response to the latest judgement.

“This is just another instance in which BT’s efforts to save money on pensions has been knocked by the courts,” explains CWU assistant secretary Dave Jukes.

“There’s no indication as yet that BT intends escalating this particular case to the Supreme Court, and I’d like to hope it will be wary of continuing its costly legal losing streak.

“The best hope is that BT just draws a line under both issues and simply accepts its pension liabilities.”