The Company and the CWU recognise that the BT Pension Schemes are an important benefit within the overall reward package offered to our UK employees.  However, it is important that we keep our pension arrangements under review, both to protect the schemes and to make sure that they move with the times. It is only by doing this in the past that we find ourselves in a sound financial position today.

BT appreciates that any discussions concerning pensions will be of key concern to the union but now wishes to fully engage with the CWU, to explore the options available to update the current schemes and to ensure we have an agreed approach which will underpin the future viability of the BT Pensions Scheme (BTPS) in a revised form.  We want to offer members more choice, while recognising that the demands being placed on the schemes are increasing. People are living much longer in retirement; the financial returns on pension scheme investments are lower than they were; and increased Government regulations have added to the costs.

We also need to make sure that there is a fair distribution of benefits between the members of our three principal schemes: the BTPS, the BT Retirement Plan (BTRP) and the Syntegra Limited Flexible Pension Plan (SLFPP).

It is important that we apply any changes in time for the next triennial actuarial valuation. As such, we would like discussions to start as soon as possible. This should enable us sufficient time to implement any changes to BTPS before the commencement of the next triennial valuation in 1 January 2009. These discussions would include representation from your executive and would have a remit to consider all available options to ensure a long-term sustainable future for BTPS.

In summary, the Company believes that, by working together in partnership, we can find solutions to these challenges. I have asked Tom Keeney to contact you to arrange to meet.

Yours sincerely,

Alex Wilson
Group HR Director