The High Court has ruled that a guarantee given by the Crown over BT’s pension scheme liabilities when it privatised in 1984 does extend to members who subsequently joined the scheme.
The Court found that the wording on the relevant statutory provision was sufficiently wide to include new joiners after privatisation. However, this guarantee does not extend to participating employers other than BT. In addition. the Court confirmed the trustee’s position that the requirement in the scheme rules for BT to ‘restore the solvency of the fund’ on winding up entailed buying out the scheme’s benefits in the form of annuities.
The decision is important because it impacts on the trustee’s assessment of support for the scheme and may also be a factor in fixing the amount of the Pension Protection Fund (PPF) levy payable by the scheme.
It is not currently known whether the government will launch an appeal.