Court clarifies BT pensions guarantee

It said the Government guarantee of BT's pension scheme covered both members who worked for the company before it was privatised and those who had joined it since.

The so-called Crown Guarantee was made by the UK government in 1984 when BT was privatised, and only comes into effect if the company becomes insolvent.

It requires the Government to pay any outstanding liabilities faced by the scheme for the payment of pensions.

BT's pension is the UK's largest private sector scheme with assets worth more than 33.9 billion and more than 340,000 members.

But it had a deficit of 9.1 billion when it was last valued in December 2008 – the largest shortfall for a FTSE company.

Yesterday's case was brought by the trustees of the scheme to clarify the scope and extent of the Crown Guarantee, including whether it covered all workers, or only those who were employed by the firm when it was privatised in 1984.

The trustees stressed that they did not have concerns about the solvency of BT.

The Government had previously argued that the guarantee should apply only to pensions accrued by members before the company was privatised, or only cover workers who had joined the scheme before privatisation.