Page last updated at 13:19 GMT, Friday, 19 December 2008

Union members back BT pension cut

BT van
CWU members gave the plan strong support

Members of the Communication Workers Union (CWU) have given strong support to plans which will cut the benefit of their pension scheme.

On a 40% turnout they voted by 67% to 33% to accept BT's recent proposals.

BT wants to cut the traditional link with final salaries, raise the normal retirement age to 65, and build up pension entitlement at a slower rate.

The changes for 65,000 staff in the BT final salary scheme will affect pensions earned after 1 April 2009.

Pleased

"Maintaining the defined benefit pension and improving the defined contribution pensions in BT have been our key objectives in these negotiations," said Andy Kerr, deputy general secretary of the CWU.

PENSION SCHEMES
Final salary: a proportion of your earnings in, usually, the last year of employment
Career average: a proportion of your earnings in each year of employment
Defined contribution: relies directly on the build-up of an investment pot


"I am pleased that our members have backed the proposed agreement by such a large margin."

Members of the Connect union at BT also voted strongly in favour of the deal, with 85% in favour and 15% against.

A total of 59% of members took part in the email ballot.

Expensive scheme

BT has been desperate to cut the continuing cost of maintaining its pension scheme.

In its recent half-year results the group revealed its scheme had a surplus of 360m on assets of 34.4bn.

But it still paid 320m in the past year towards removing a previous deficit.

BT said that the changes to its scheme would save it about 100m a year on its normal contributions.



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