Ofcom Digital Communications Review - FAQs

1.       What agreement have BT and Ofcom announced? What is the result of the Ofcom Digital Communications Review (DCR)?

BT and Ofcom have reached agreement on a long-term regulatory settlement that will see Openreach become a distinct, legally separate company within the BT Group with its own Board. The agreement is based upon voluntary commitments submitted by BT that the regulator has said meet its competition concerns.

Once the agreement is implemented:

  - Openreach will become a legally separate company within BT with its own independent Board.

  - Around 32,000 employees will transfer to the new Openreach Limited following TUPE consultation, and once pension arrangements are in place.

  - Openreach Limited will have its own branding, which will not feature the BT logo.

  - The Openreach CEO will report to the Openreach Chairman.

Openreach, which builds and maintains the tens of millions of copper and fibre lines that run from telephone exchanges to homes and businesses across the UK, will assume greater independent and strategic autonomy under its own independent Board of Directors.

 2.       What is the position on pensions?

Pensions have been a key aspect of the discussions between BT and Ofcom, and the BT Pension Scheme Trustees have also actively engaged in this process.  BT has agreed with Ofcom that people will only move to Openreach Limited once acceptable arrangements are in place for the ongoing provision of pension benefits.

3.       What is the Trustee doing?

Going forward, the Trustee will continue its active engagement with Government, BT and other stakeholders to seek to conclude the remaining pension matters in the interests of our members so that these arrangements can proceed.

 4.       What arrangements need to be put in place for pensions?

To enable current BTPS members to continue to earn benefits in the BTPS when they become an Openreach Limited employee, the BTPS Trustee would need to agree to Openreach Limited becoming a ‘participating employer’ in the BTPS. 

 This is expected to require an extension of the Crown Guarantee whereby Government provides Openreach Limited with a further crown guarantee that covers obligations it has to the BTPS.

 5.       How long would it take to extend the Crown Guarantee for the BTPS?

Extending the Crown Guarantee requires Government support and could take some time to achieve.

6.       Why does the Crown Guarantee need to be extended for the BTPS?

The Crown Guarantee only applies to BT plc.  For Openreach Limited to become a participating employer in the BTPS, a new crown guarantee is required.

7.       Have Government agreed to extend the Crown Guarantee?

The Trustee continues to liaise with Government on this issue and we are hopeful that the situation can be resolved in the interests of our members.

 8.       What does that mean in terms of the timing for when people move to Openreach Limited?

Irrespective of which pension scheme they are in, all Openreach people will move to Openreach Limited at the same time – once acceptable arrangements are in place for the ongoing provision of pension benefits.

9.       Why is the Crown Guarantee being mentioned? Am I going to lose the benefit of the Crown Guarantee?

The Crown Guarantee ensures that, in the unlikely event of a winding up of BT plc, BT plc’s ongoing contribution obligations to the Scheme would be met by the Government.  The Crown Guarantee does not cover the benefits of individual members but rather enhances the security of member benefits in the Scheme overall, including the pension benefits that you have in the Scheme.

The Crown Guarantee is a significant protection for our members if BT plc were to become insolvent.  Consequently, the Trustee is actively engaged in this review and is seeking to ensure that the scope and effectiveness of the Crown Guarantee is maintained.

 10.   I work for Openreach.  Will my pension benefits be affected?

The arrangements for the future governance of Openreach will have no impact on the benefits that you have accrued to date in the Scheme and whilst you remain employed by BT plc.

BT have agreed with Ofcom that the transfer of your employment to the new Openreach company will only take place once acceptable arrangements are in place for the ongoing provision of pension benefits.

11.   I am not employed by Openreach, do these arrangements affect my pension?

If you are employed in another part of the BT Group the arrangements that BT have agreed with Ofcom for the future governance of Openreach will have no impact on your pension benefits with the Scheme.

12.   What is the Crown Guarantee?

For details on the Crown Guarantee please see details on the BTPS website.  http://www.btpensions.net/192/364/crown-guarantee

13.   What happens next / when will I know more?

The timelines for moves to Openreach Limited are linked to pension arrangements which may take some time to resolve; there will be no movement of people ahead of this. In the meantime, there is nothing you need to do. The Trustee will continue to engage with and update members as the process progresses.

 

March 2017

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