British Telecom to Shake-Up Pension Scheme
November 3, 2008
British Telecom is planning to make reforms on a large scale to their £35billion pension scheme after the shock profit warning from the company last week. The company wants to limit liabilities in the future by increasing staff contributions, basing payouts on career average, and raising the retirement age from 60 to 65. If the new scheme is approved, it will mean that the scheme’s 65,000 members, which is one of the biggest in the country, will get less for working longer.
Mike Bartlett, the spokesman for British Telecom, said that they have been holding talks with the unions and trustees for months now in order to ensure that their pension scheme is sustainable on a long-term basis. They are intending to close any of their schemes for pension, he continued, as this review is occurring so that the schemes and their members are protected. He added that they will not make a final decision without more consultation with the trustees and unions.
Right now, discussions are being held with Connect and the Communication Workers Union. Connect is who represents the managers of British Telecom. Proposals are going to be sent to the members of the schemes in upcoming weeks during the beginning of a formal consultation. The pension trustees of the company must also approve of the plan.
This news comes after British Telecom reported on Friday that their earnings are going to be less than market expectations, following poor performance from its Global Services division, of which provides multinational businesses with IT networks.
Find out more about British Telecom by visiting www.bt.com
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