The European Commission has ruled that the Crown Guarantee underpinning BT pensions is, to a very limited extent, contrary to European competition rules. This finding is very limited – it finds only that this gives BT a slight commercial advantage over its competitors as the Crown Guarantee limits BT’s obligation to pay a full levy to the UK Pension Protection Fund. BT will now have to pay PPF Levy payments in full.
The Commission has also confirmed that since the Crown Guarantee itself brings no other advantage to BT and the guarantee benefits BT employees rather than the company itself, that the guarantee is not in breach of EC competition rules. The Crown Guarantee will therefore continue.
This story is being reported in today’s press, and Connect will update you of any developments.
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