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BT faces battle with unions over pension scheme overhaul

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BT faces a confrontation with its trade union over plans to reduce pension contributions for 21,100 rank and file staff in a bid to ease the burden of the massive funding deficit in its retirement fund.

The Communication Workers Union (CWU) said it will urge its members to reject the company’s proposals in a 60-day consultation beginning tomorrow.

BT said it could keep its keep its defined benefit scheme open for 21,100 non-managerial staff including engineers. However, it will cut its share of contributions in an attempt to encourage them to voluntarily switch to a defined contribution scheme.

Alternatively, BT said it could close the final salary and force staff into the defined contribution scheme, albeit with a three-year boost to its employer contributions. Around 11,000 manager will be given no option but to move over on the same terms.

The CWU, which represents BT engineers, said BT’s plans were “unacceptable”.

Deputy general secretary Andy Kerr said: “We would like to reach an agreement with BT but the current proposals for both schemes are unacceptable.

“We are absolutely opposed to the closure of the defined benefit pension and any changes to it need to take account of members’ retirement expectations. The defined contribution scheme also needs to be significantly improved.”

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