The pension and pay deal

CWU North East Branch Hadrian TSC 2 Melbourne Street Newcastle upon Tyne NE1 2JQ.Tel 01912222336


Dear Member,


Due to the fact the pension and pay deal consultative ballots are imminent this poses the Branch difficulty in arranging special meetings in advance. However, if there is a demand from Members to hold a Meeting we will do all we can to accommodate this. Therefore, we are writing out to recap some key points.


All this information and more can be found in the pay and pension briefings 2,3 and 4 which we have previously sent out. If you have not received them then please contact us.


BT was persuaded to shift position by the CWU campaign, the outcome is a better deal and BT will be paying more.


The Executive and North East Branch firmly believe that the company’s full and final offer is the very best that can be secured by negotiation, for both members of the BTPS and the BTRSS.

The pension and pay deal are recommended, please use your vote.


If you have any queries on any of the information contained in this letter, please email




BTPS funding deficit was last measured at £13.9 billion. BT are currently paying £700m a year which is expected to rise

BTPS future service costs likely to more than double due in part to low interest rates and increased longevity.


The BT Consultation was as follows


BTPS 2 options

Close the scheme and move everyone to BTRSS

Amend the scheme which would see members paying more for less benefits BTRSS improvements

1% increase in employer contribution’ London weighting to be made pensionable.


Consultation outcomes


Rejection of BT’s proposals for both BTPS and BTRSS BTRSS 1% not enough

BTPS members concerns about maintaining defined benefit pensions, paying more for less BT preference was to end defined benefit pension

BT were persuaded to shift position by CWU campaign.


Proposed Legally Binding Agreement.


BTPS to close for all future service with members moving to BTRSS

A new hybrid pension option for current BTPS members with defined benefit and defined contribution benefits.

Ensures improvements in the BTRSS

Transition payments and new retirement flexibilities

Redundancy pay formula for all CWU grades, BT reaffirms existing approach to job security Provides a pay increase of at least 6% over 2 years.




Sections B/C will close 30th June 2018

All B/C BTPS members will be auto enrolled into the improved BTRSS

BTPS benefits will rise with CPI inflation

Late retirement factor on Pre April 2009-service if defer pension after 60. Only available if deferred

National insurance rebate will cease

BTRSS auto enrolment Section B 6% Section C 5%

Transitional payments will be made for up to 10 years


Hybrid Pension


BT will set up a new trust-based Hybrid pension for BTPS members

Defined benefit and defined contribution sections

Maintains guaranteed DB benefits outside the BTPS and helps to minimise risk

Target implementation Sept/Oct 18 no later than April 19

All basic salary will be pensionable

Member contributions 6.25% of pensionable pay

Pensionable pay will include P&PP, shift, night duty and outside broadcast allowance with no member contribution

Defined benefits up to Salary Threshold of £17,500

Career average pension with CPI revaluation of benefits

Pensions in payment to rise by CPI capped at 3.5%

Transition payments additionally paid on pensionable salary above threshold

Medical retirement / Death in Service benefits




70% of CWU members pay the default

Minimum payment to rise from £1,500 to £2,000 (pro rata for part time) and future increases by CPI

P&PP to be pensionable with BT and members contributing.

Shift night duty and outside broadcast allowances to become pensionable with no member contribution

Revised death in service 10 x pensionable salary and value of individual pot.


Redundancy Pay


Existing arrangements date back to 1980s and only cover BTPS members

BTPS closure would mean pension aspects are no longer available

New agreement will cover all CWU grades

BT reaffirms commitment to take all steps to avoid compulsory redundancy

Provide a max of 104 weeks of pensionable pay at 27 years, and minimum payment of 12 weeks Not impact paid leaver.


New Flexibilities Defined Benefit


Work for BT and draw DB benefits for up to 2 years from age 55

Improved early retirement factors from BTPS pension

From 2019 ability to split BTPS benefits and take pre-April 09 and post April 09 benefits separately.


Pay 2018-2019


2018 3.0% plus £150 for workforce 20/20 grades

2019 3.0% plus £150 for workforce 20/20 grades

All fully consolidated and pensionable. Cash amounts pro rata for part timers Narrows gap between workforce 20/20grades and others

Top 25% of UK pay deals.


Next Steps


BT will provide a modeller

There will be Consultative ballots where everyone will get a vote BTPS members will vote on BTPS/Hybrid

BTRSS members will vote on BTRSS changes

Timing of Ballots to be determined


To summarise


Secured Defined benefit option for BTPS members as part of hybrid Transition payments for up to 10 years

Improved BTRSS for 70% of members who will get 25% more Extended redundancy terms for a

A pay increase worth at least 6% over 2 years




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