New staff at BT will have to work an extra five years before they can retire and pay more for their pensions under proposals thrashed out with unions and pension trustees.
As part of an agreement that is likely to become the template for all struggling final salary schemes, the telecoms group looks set to increase the retirement age from 60 to 65. It also aims to change the final salary link to a career average rather than earnings at retirement.
BT, which operates one of the largest pension funds in the private sector, with liabilities of £35 billion, said that its proposals include increased contributions for scheme members. The retirement fund has about 65,000 active members, 97,000 deferred members and 178,000 pensioners.