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For
the executive directors and most other senior executives
who joined the company prior to 1 April 2001, pension
benefits are one-thirtieth of final salary for each
year of service with two-thirds of the executive’s
pension for the surviving spouse. Those with longer
BT service have undertakings of pension benefits of
two-thirds of final salary payable at normal retirement
age (inclusive of the pension equivalent of any retirement
cash lump sum) plus a pension of two-thirds of the director’s
or executive’s pension for the surviving spouse.
On death-in-service, a lump sum equal to four times
annual salary is payable together with a pension of
two-thirds of the director’s or executive’s
prospective pension for the surviving spouse. Pensions
are based on salary alone – bonuses, other benefits
and long-term incentives are excluded.
BT
closed its final salary pension arrangements to new
employees with effect from 1 April 2001 and this has
been reflected in the retirement provision granted to
executive directors and other senior executives hired
since that date.
For
these executive directors and other senior executives,
retirement provision is made on a defined contribution
basis where the company agrees to pay a fixed percentage
of the executive’s salary each year towards the
provision of retirement benefits. Typically this is
20-30% of salary. On death-in-service, a lump sum equal
to four times annual salary is payable.
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