BT has announced the closure of its defined benefit scheme and agreed to work with the Communication Workers Union over a forthcoming ‘hybrid’ solution.
In October 2016, research by index provider MSCI showed that with a deficit of £9.5bn, the DB scheme might have been the second-worst funded pension scheme in the world.
The company will start the process of closing the BT Pension Scheme from May 31 2018.
BT will provide additional transition payments to former BTPS members moving into the defined contribution BT Retirement Saving Scheme.
The company will also increase its contribution rate to 11 per cent for a temporary period.
The deal between the company and the CWU will see plans drawn up for 20,000 non-management staff.
In a statement on its website, the company said: “It is intended that this new arrangement will combine elements of both defined benefit and defined contribution pension schemes.”
In January, BT had agreed a pensions deal with the Prospect Union surrounding the future of 11,000 managerial staff.
