News

BT Pension Scheme: Pension Increase Exchange (PIE) for Retired members

8 May 2013

As part of the 2009 agreement reached between the unions and BT on the future of the BTPS, we agreed that individual members would have the flexibility to swap an element of their future pension increases for a higher initial pension – a Pension Increase Exchange or PIE.

This has been available to people activating their pension since 1 April 2009 but the agreement also envisaged the possibility of this being made available to existing pensioners – that is, those who retired or activated their pension prior to 1 April 2009. 

We have been in discussions with BT about extending this Pension Increase Exchange (PIE) option for pensioners in the BTPS. Broadly, the union was keen to ensure that the roll-out of this exercise would be handled sensitively, given the potential vulnerability of some of the individuals to whom the offer would be made.

The BT initiative complies with, or exceeds, the Code of Practice on this issue which is designed to ensure that pensioners get a fair deal and that vulnerable people are not put at risk. A copy of the Code is available at http://www.incentiveexercises.org.uk/the-code-of-practice

BT will be using Independent Financial Advisors to run a helpline. Any pensioner who wishes to give up future increases must contact the helpline where the IFA will go through all the issues that need to be considered – following up the conversation with a letter confirming the information.

The IFAs will not be targeted on achieving a conversion rate, and the IFAs will not issue members with an acceptance form if the IFA believes that the pensioner does not understand what is being discussed. They will instead suggest that a member calls back to discuss the option again and offer the opportunity for someone to join the call with them.

 In line with the Code, those over the age of 80 will have to opt into the PIE exercise.

 The PIE exercise will eventually involve over 100,000 pensioners under age 80 and some 40,000 who are over age 80. The 35,000 who have already been given the option of PIE (those who have activated their pension since 1 April 2009) will not be contacted and nor will those with very small pensions.

 The letters which announce that this is going to happen have already been sent to pensioners. However, given the size of the project, the exercise will be broken down into batches. The first batch of offers, for around 15,000 BTPS members, are being spread over two weeks, with the first half scheduled to arrive in the week commencing 20 May and the second the week after. 

 The pensioners in each batch will receive comprehensive documentation.

 Retired members who have questions about their own PIE calculations should contact the IFA helpline. The union will not be able to comment on individual calculations. Details of the IFA helpline will be provided to members when they receive their information pack.