BT Group (LON:BT.A) is closing its defined benefit pension scheme for 10,000 managers, the former telecoms monopoly has said. The news came as the blue-chip group updated investors on its pension scheme overhaul.
BT’s share price has lost ground in London in today’s session, having given up 0.72 percent to 248.55p as of 14:31 GMT. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 1.18 percent in the red at 7,355.28 points.
Pension scheme update
BT announced in a statement today that it will close its defined benefit pension scheme to managers for the future build-up of benefits on May 31. From that date, pension contributions for those affected will go into new individual, defined contribution, accounts with its BT Retirement Saving Scheme. The telco noted that it was still reviewing feedback with regard to team members and will continue to discuss the issue with the Communication Workers Union before making a final decision.
“We are working hard to ensure fair, flexible and affordable provision for members of our pension schemes,” Alison Wilcox, BT Group HR Director, commented in the statement.
The update comes after BT recently suffered a setback in its efforts to overhaul its pension scheme, with the High Court rejecting the telco’s attempt to change the index for pension increases.
Analysts on BT Group
Deutsche Bank remains bearish on the former telecoms monopoly, having reiterated its ‘sell’ stance on the company on Friday, without specifying a price target on the shares. According to MarketBeat, BT currently has a consensus ‘hold’ rating and an average price target of 327.24p.
BT updated investors on its third-quarter performance on Friday, revealing a fall in revenue, while reassuring investors that it was on track to meet its full-year targets.