2014 Court of Appeal decision

The Court of Appeal decision given on 14 July 2014  provided helpful clarification in relation to the guarantee provided by the Government to the BT Pension Scheme.  This guarantee known as the Crown Guarantee provides that, in the unlikely event of a winding up of BT plc, most ongoing contribution obligations of BT plc to the Scheme would be met by the Government. In this regard it should be emphasised that the Crown Guarantee does not cover the benefits of individual members but rather enhances the security of member benefits in the Scheme overall.  

It is important to emphasise that the Crown Guarantee is only relevant in the unlikely event of a winding up of BT plc and, in such circumstances, would enable the Scheme to receive ongoing contributions, if needed, to fund the payment of benefits.

The Crown Guarantee is, without doubt, a significant protection for members of the Scheme in the event of the winding up of BT plc, and the clarity provided in the Court of Appeal judgement is helpful in understanding the scope, effectiveness and applicability of the Guarantee.