LONDON (Reuters) - BT (BT.L) said on Monday it would close its defined benefit pension scheme after it struck an agreement with a major union on the future arrangements for 20,000 staff.
Britain’s biggest broadband and mobile phone provider said it expected to close its scheme, one of the biggest in the country, to future benefits on May 31 but that some administrative-related issues remained to be resolved.
BT and the Communication Workers Union have agreed to work together to establish a new “hybrid” pension arrangement over the coming year for team members leaving the scheme, combining elements of both defined benefit and defined contribution pension schemes.
“These changes bring far more financial certainty for the company in terms of our future pension arrangements,” Chief Executive Gavin Patterson said.
“This will help us balance the needs of BT pensioners with the investments we are making to future-proof the UK’s communications networks and improve customer experience.”
The BT Retirement Saving Scheme, a defined contribution scheme, currently has around 35,000 employees.
Reporting by Kate Holton; editing by Jason Neely