This telecoms giant had been looking to substitute its current measure – the Retail Prices Index (RPI) – with the Consumer Prices Index (CPI), which typically increases at a slower rate.
It was asking to make this switch for Section C of its defined benefit BT Pension Scheme, which covers around 80,000 workers and former workers.
This decision upholds an earlier High Court ruling. However the Court of Appeal stated that BT couldn’t make this change “at this time” opening the door to further challenges in future.
The union Propsect estimated that this change would have resulted in these members losing an average of £24,000 in pension benefits.
BT is not the first company looking to change its measure of inflation as a way of reducing pension liabilities.
Last month Barnado’s lost a ruling in the Supreme Court, which also prevented it switching from RPI to CPI. This final ruling came after two years after a similar decision in the Court of Appeal.
Prospect national secretary Noel McClean said: “We welcome the Appeal Court’s decision to uphold the original High Court ruling.
“BT was seeking to cut the future incomes of BT pensioners and current employees by tens of thousands of pounds in order to transfer an estimated £2bn to shareholders, and Prospect does not believe this was acceptable.”
He added that last wee the High Court prevented BT from attempting to cut the benefits of 8,000 people in Section B of the same pension scheme, albeit using a different mechanism.