BT Pension Scheme - Crown Guarantee

21 October 2010


LTB 922/10 BT Pension Scheme: Crown Guarantee
 No. 922/2010
 Ref: NC/SD/BTPS 6.1
 Date: 21st October 2010

To: All Branches with BT members
 Dear Colleague,
 BT Pension Scheme: Crown Guarantee

The High Court today gave judgment in a case designed to clarify the
 extent of the Crown Guarantee.
  The Crown Guarantee was put in place by the UK Government on the
privatisation of BT in 1984 and would only come into effect if BT ever
became insolvent. The Government gave a guarantee that it would stand
behind BT's obligations to the BT Pension Scheme (BTPS) so providing
protection for BTPS members.
 The case was brought by the Trustee of the BTPS to clarify the scope
and extent of the Crown Guarantee as this has never fully been
resolved. The key part of the ruling is that the Crown Guarantee can
cover members who joined both before and after privatisation.
 The CWU has long called for clarity on this issue and the outcome of
the case is welcome.
 The BTPS Trustee has said that the case gives additional clarity and
is favourable for BTPS members.
 BT, which fully supported the case, has stated that the case will
have no impact on the existing agreed payments that will be made into
the BTPS.
 While resolving the most important questions about the Guarantee the
Judgment did leave some further issues to be resolved. It is also
possible that the High Court's decision may be subject to appeal by
the Government. Further developments will be reported in due course.
 A copy of the Trustee and BT statements are attached and further
information about the Crown Guarantee is available in LTB 303/2006.

Yours sincerely

Nigel Cotgrove
ASSISTANT SECRETARY