BT goes to court over pension deficit

BT is due in court today to find out whether the state will intervene to plug the huge financial gap in the company's pension scheme.

At the end of last year there was a pre-tax deficit of 9 billion in the scheme, due to three times as many employees taking out as paying in.

BT made a number of job cuts and agreed a payment plan of 525 million a year for at least three years to try and fund the scheme, but despite trustees giving it the go ahead, the Pension Regulator claimed to still have concerns about its effectiveness.

This week will see the start of a case at the high court to see if BT can get any help from the Government.

During the 1980s, the Conservative Party agreed to back the company financially if any monetary problems occurred, after BT was privatised.

The deal never got the backing of all relevant authorities, however, so now BT will have to wait on the court's decision expected in October as to whether it can cut its liability.

BT has just managed to avert another staff related crisis where workers were set to go on strike for better pay.

However, after negotiations between the telecoms giant and the Communication Workers Union (CWU), the strike was called off and a pay rise of 9.3 per cent over 39 months was agreed.