Government loses BT pensions case

The government has been ordered by the High Court to cover BT employees' pension packages if the telecoms giant ever went into liquidation, after attempting to scrap the 1984 Crown Guarantee.

Under the terms of the agreement – which was made when the company was privatised – the state must pay any outstanding pension liabilities owed by BT if the company is ever to become insolvent.

Yesterday (October 21st 2010), Mr Justice Mann ruled that the guarantee still applies to all BT employees – including those who have joined in the 25 years since privatisation – but acknowledged that BT appears unlikely to go bust in reality.

"BT welcomes the fact that the judgment provides our employees and members of the BT pension scheme with further clarity regarding the extent of the government's obligations," the company said in a statement.

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Last month, a poll from the Association of Consulting Actuaries found that 53 per cent of small businesses believe pension auto-enrolment will add "significantly" to their overheads.

Posted by Cameron Thomson

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