BT Warns of Legal battle With the Government to Reverse Pension Changes

    The government of the United Kingdom has been warned by BT that the company will launch a legal battle if it does not reverse its recent pension changes. The telecoms giant has said that the changes will greatly increase the burden of the liabilities of the firm on its retirement scheme.

    The said changes, which regard pension obligations that are owed to civil servants with an assured minimum pension, will greatly affect the telecoms giant since part of its scheme still maintains some connections to the civil service scheme of Whitehall from before the company was made private.

    Sky News first reported that the lawyers of BT have already sent a letter before action to the government, warning to bring in a judicial review if ever the said changes are not wound back.

    In a statement, a spokesperson from BT said: “The government has taken a decision about how benefits are increased in public sector pension schemes, and by implementing it in a particular way they have created an unintended impact on the BT Pension Scheme.”

    The spokesperson added: “We have started a legal process as we believe there are fairer ways for the government to meet its commitments, without creating this impact on BT’s private sector pension scheme, and we hope the government will reconsider the route they have taken.”‎

    The telecoms giant already has a huge estimated pension deficit amounting to £14bn, and it is due to report the results of the company this week. Some sources informed Sky News that the estimated add-on from the possible changes made by the government will be a comparatively small £100m. However, the sources said that the amount could increase in the future.

    A spokesperson from the Treasury said that they were “disappointed” that BT had opted to pursue legal action.