Union members have voted in favour of accepting the pension package unveiled by UK telecom company British Telecom (BT), which will affect pensions earned after 1 April 2009 in the final salary scheme of 65,000 BT staff.
The members of the BT Pension Scheme who were in consultative ballots with trade unions Connect and the Communication Workers Union (CWU) have voted in favour of the pension package that BT had come up with earlier in the year.
BT had proosed delinking pension with final salaries, raising the normal retirement age to 65, and building up pension entitlement at a slower rate as it sought to cut the continuing cost of maintaining its pension scheme.
BT had revealed a surplus of £360 million on assets of £34.4 billion in its pension scheme, but still paid £320 million last year towards removing an earlier deficit. It said the changes to its scheme would save it about £100 million a year on its normal contributions.
BT had a formal 60-day consultation with staff in November on the proposed changes to its £40 billion (€43 billion) defined benefit (DB) scheme, which included an increase in retirement age from 60 to 65 and a rise in employee contributions. BT also intends to improve its own contributions to the defined contribution (DC) schemes.
The Communication Workers Union said around 67 per cent of its members voted in favour, with 33 per cent voting against the offer. The turnout of 40 per cent was considered high in context of a postal ballot.
Reports quoted CWU deputy general secretary Andy Kerr as saying that maintaining the defined benefit pension and improving the defined contribution pensions in BT have been the union's key objectives during the negotiations, and that he was pleased that members chose to back the offer with a huge margin.
Members of the Connect union also voted in favour of the agreement in a ballot held via e-mail that registered a 59 per cent turnout. 85 per cent of the union members voted in favour of the agreement, while 15 per cent voted to reject.
The CWU and Connect will now jointly sign the agreement on pensions with BT. Both unions proceed with detailed discussions with BT on the implementation of the complex agreement, changes of which will be applicable from 1 April, 2009.