BT Group (LON:BT.A) has lost a legal bid to make changes to its pension scheme, the Guardian has reported. The former telecoms monopoly had sought to change the index used to calculate pension increases paid to ‘section C’ members of its defined benefit pension scheme.
BT’s share price has slipped into the red in today’s session, having given up 0.67 percent to 259.15p. The shares, however, are outperforming the broader market selloff which has seen the benchmark FTSE 100 index give up 1.10 percent to 6,945.19 points so far this morning.
BT loses pensions appeal
The Guardian reported yesterday that the court of appeal had dismissed BT’s request to change the way it calculates increases to pensions, a move which would have affected more than 80,000 members of the scheme. The telco currently uses the retail prices index (RPI) for the ‘section C’ members of its defined benefit pension scheme, but believes that the rules allow a switch to another index in certain circumstances. Sections A and B of the scheme are linked to the consumer price index (CPI).
The move came after the high court decided in January that it was not possible to change to another index, and the court of appeal has now upheld that decision.
“We are disappointed with the outcome and will now consider the judgment in detail in order to decide next steps,” BT said, as quoted by the Guardian.
Analyst ratings update
Barclays reaffirmed BT as an ‘equal weight’ yesterday, without specifying a price target on the shares. According to MarketBeat, the former telecoms monopoly currently has a consensus ‘hold’ rating and an average price target of 272.67p.
Goldman Sachs meanwhile turned bullish on the blue-chip telco, arguing that the company is trading at an ‘increasingly unwarranted’ discount to its peers.