BT has lost a Court of Appeal attempt to swap one section of its defined benefit (DB) pension schemes from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI).
In a judgment handed down today (4 December), the Court of Appeal concurred with a High Court decision, given in January this year, that RPI had not become an inappropriate measure of inflation.
The index is used for uprating and revaluing pensions for pensioner members in Section C of the scheme, but a change is only allowed where the index is deemed inappropriate.
Sections A and B of the scheme were switched to CPI in 2010 alongside public sector schemes and deferred members in Section C. A further cohort of the sections 45,000 members will have been swapped to CPI earlier this year when the scheme closed to future accrual.
A BT spokesperson said: "We are disappointed with the outcome and will now consider the judgment in detail in order to decide next steps."
As of 30 September, the scheme had an accounting deficit of £4.5bn on a net of tax basis (£5.3bn gross of tax), a reduction of £1.2bn (£1.5bn) from March.
The company said a £2bn deficit contribution was largely to thank for the improved gross position, offset partly by actuarial movements and lower investment returns. It also anticipated a bill running into the "hundreds of millions of pounds" to be recognised following October's High Court ruling on guaranteed minimum pensions.
The Court of Appeal's decision follows a similar Supreme Court judgment last month to deny the same swap for the Barnardo's pension scheme - although this was on a different formulation of the scheme's rules.
Last month, the BTPS named former Association of British Insurers director-general Otto Thoresen as its trustee chairman. Thoresen is also trustee chairman of NEST.
The scheme had not responded to a request for comment by the time of publication.
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