BT Group PLC employees voted to accept the firm's proposal to move all participants to its defined contribution plan in the second quarter, said Prospect, the union representing employees in negotiation with the U.K. company.
BT offered a pay increase of up to 2% to participants in the BT Pension Scheme, London, as part of the review, Prospect said in a news release. In addition, extra transitional payments and increased employer contributions were proposed for participants moving to the BT Retirement Saving Scheme from BTPS. Increased contributions will apply to existing participants of BT's defined contribution plan as well, Prospect said.
However, the telecommunications giant said it is consulting its employees until Jan. 17 before the final plans are announced, a BT spokesman said. The £49 billion ($66 billion) defined benefit fund is expected to freeze in April 2018, according to Prospect.
Some 57% of participants of the BTPS voted to accept the proposals, Prospect said in a news release.
"We're pleased that employees represented by Prospect have voted to accept the changes we're proposing to our two largest pension schemes," BT spokesman said in an emailed comment.
Philippa Childs, national secretary at Prospect, said in the release: "This vote gives us a mandate on which to reach a final agreement with BT. While the margin among those in the BTPS is understandably much closer, members in both schemes have voted to accept the proposals."
"The improvements we have negotiated and the transition arrangements will soften the blow for those having to move. Those who are already in the BTRSS because they joined BT after 2001 will also see improvements," Ms. Childs added in the release. BTPS closed in 2001.
BT first announced its plans to review the pension fund in the spring of 2017. It's spokesman declined to comment further on the proposal. Assets of the BT Retirement Saving Scheme weren't available.