UK roundup: Union warns BT over DB scheme review
The Communication Workers’ Union (CWU) has voiced its objection to a review by BT of its giant pension scheme.
The union said it was “resolute in its determination to defend members’ pensions” and said it could ballot for strike action if the company decided to close the £43.1bn (€48.2bn) BT Pension Scheme (BTPS) completely.
BT announced the review in May, but workers were formally told of its scope last week, according to the CWU. The communications company, formerly owned by the UK government, said in May it was considering several options to close a £13.9bn shortfall, including a contingent assets deal with the scheme’s trustees.
Union representatives “left the company in no doubt as to their anger and dismay” at the review, the CWU said in a statement on its website. It demanded that the review also take into account a better deal for members of the company’s defined contribution (DC) scheme.
The defined benefit scheme was closed to new members in 2001. One representative said closing it to future accrual was a “red line”, while deputy general secretary Andy Kerr described it as “wholly unacceptable”.
Kerr said: “While this review is clearly unwelcome and unsettling for BTPS members, it’s incumbent on the CWU to enter constructive discussions with the company, because ultimately it’s crucial we ensure the long-term sustainability of our members’ pensions… The company has been left in no doubt that the CWU is serious about using industrial action, if necessary, to keep the BTPS open for current members – and, encouragingly, BT has stressed it is seeking to establish an agreed way forward.”
The BT Pension Scheme’s estimated total liability of £60bn – correct as of June 30 2016 – is almost double the company’s current market capitalisation.
The scheme had a shortfall of £13.9bn at the end of June 2016, up by nearly 40% due to a sharp rise in liabilities in the preceding 12 months.
The CWU is also involved in a dispute with Royal Mail over changes to its pension scheme.
NOW: Pensions withdraws from regulator’s master trust list over admin issue
DC master trust provider NOW: Pensions has withdrawn itself from the Pensions Regulator’s (TPR) “assurance list” of auto-enrolment providers.
The company – which is backed by Danish pensions giant ATP – said in a statement yesterday that it was attempting to “resolve historic issues processing contributions for a small percentage of clients”.
TPR said it had been reviewing NOW: Pensions’ position on the list “due to concerns about the governance and administration of the scheme, including delays processing some contributions and communicating with a portion of members”.
“There is no suggestion that the assets of members are at risk as a result of the scheme coming off the list, or that employers whose workplace pensions are in place with NOW: Pensions are not complying with their automatic enrolment duties,” the regulator said.
The issue related to NOW: Pensions changing its third-party administrator, the master trust provider said in a statement. It appointed JLT Employee Benefits as its administrator in 2014.
Delays had taken “longer than it should” to resolve due to complexities and poor quality data in some cases, NOW: Pensions said.
“We should have been more proactive in our communications with affected clients and members regarding these issues and apologise wholeheartedly to those we have let down,” said Morten Nilsson, the company’s CEO. “In this instance, we have fallen short of the standard of service we aim to provide.”
Nilsson added that he was “confident” of completing the work and returning to TPR’s list.
TPR maintains a list of master trust providers that have passed an audit of governance standards and controls and are deemed to comply with the regulator’s DC code. Following NOW: Pensions’ withdrawal, the list has 22 firms.
The People’s Pension passes 3m members
The People’s Pension – one of the providers still on TPR’s assurance list – has just signed up its three millionth member.
The company is the UK’s largest private sector master trust, with £2.3bn in assets. It began its auto-enrolment provision in October 2012 and has signed up more than 65,000 employers, mainly small companies.
The National Employment Savings Trust – arguably the most prominent of the master trust providers – had 4.5m members and £1.7bn in assets at the end of March, according to its latest annual report.
Patrick Heath-Lay, chief executive of The People’s Pension parent company B&CE, said: “To reach the milestone of 3m members in a little under six years is a fantastic achievement. Thanks to the hard work and dedication of all the team at The People’s Pension, we are proud to have contributed to the success of auto-enrolment and helped ensure that millions of workers are now saving towards their retirement.”