Employment News

European Commission Investigation into State Guarantee for BT Pensions

30 November 2007

The European Commission has opened an investigation under EC Treaty state aid rules on the effects of the BT Pensions Scheme (BTPS) Crown Guarantee covering the pension liabilities on the EU telecommunications markets. The investigation is likely to take between one and two years.

The important point to note at this stage is that Commission does not question the principle of the guarantee as far as it concerns BTPS pension liabilities. The issue in question is the degree to which the guarantee means BT is exempted from certain financial obligations, such as the size of the payment of the levy to the Pension Protection Fund.

At this stage of the investigation, the Commission considers that these exemptions from the application of the normal rules may confer a financial advantage to BT and may therefore constitute state aid.