BT takes sipp for new DC scheme
UK - BT, the telecoms giant, has appointed Standard Life to provide a new corporate self-invested personal pension (CSIPP) to replace its existing defined contribution (DC) schemes.
The telecoms company is currently in a formal 60-day consultation period with staff members, which started in November 2008, over changes to both its defined benefit (DB) and DC schemes.
BT confirmed in November it planned to increase contributions to its two DC schemes - the BT Retirement Plan (BTRP) and Syntegra Limited Flexible Pension Plan (SLFPP) - from 2009. (See earlier IPE article: BT consults with staff on pension changes)
It also revealed new employees would be auto-enrolled into a new contract-based DC scheme which would replace the BTRP and the SLFPP.
The company has now confirmed Standard Life will develop a corporate sipp for the 20,000 employees who are currently members of the two DC schemes, which will launch in April 2009 as the first members will join the scheme from existing arrangements.
Standard Life said the BT corporate sipp would provide a default fund for new employees that incorporates a ‘lifestyle' strategy, and it would also "match" the same funds currently offered by the existing DC schemes to "simplify the initial transition of members".
It also stressed there would be no member cross-subsidy in the new scheme, as members would only pay for the SIPP functionality they use, although Standard Life said it would offer access to 156 insured funds as well as specialist ethical, SRI and Shariah-compliant investments.
Kevin O'Boyle, head of pensions at BT, said: "BT selected Standard Life after a thorough review of the market place in conjunction with our professional advisers PwC. Standard Life was impressive throughout the whole process and I am confident they will provide a leading edge, cost-effective solution for our employees."
Andrew Dickson, senior business development manager at Standard Life Corporate Solutions, said: "The scheme will set a new benchmark in the corporate pensions market through the mix of innovative contribution structure, including underpins for lower earners and generous employer matching, as well as auto enrolment, share save roll over and scheme governance."
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