BT threatens legal battle with the government to reverse pension changes
BT has warned the government that it will begin a legal battle if it does not reverse recent pension changes, which the telecoms giant has said massively increase the burden of its retirement scheme liabilities.
The changes, which regard pension obligations owed to civil servants with a guaranteed minimum pension, affect BT because part of its scheme still retains links to Whitehall's civil service scheme from before the company was privatised.
BT's lawyers have sent a letter before action to the government, threatening to bring a judicial review if the changes are not wound back, Sky News first reported.
Read more: BT share price drops as it reveals reduced revenue but higher profit
"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," a BT spokesperson said in a statement.
"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."
BT already has a massive estimated £14bn pension deficit, and is due to post results this week. Sources told Sky News that the estimated add-on from the changes will be a comparatively small £100m, but that this could rise in the future.
A Treasury spokesperson said they were "disappointed" that BT had chosen to pursue legal action.
Read more: BT dealt a blow by Moody's after shares hit lowest level since London Olympics
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