BT 2009 Annual Report Download - page 23

ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW
BUSINESS AND FINANCIAL REVIEWS BUSINESS REVIEW
21BT GROUP PLC ANNUAL REPORT & FORM 20-F
BUSINESS AND FINANCIAL REVIEWS
We also participate in the Federated Apprentice Scheme, which
offers young adults employed by SMEs in the South of England the
opportunity to gain a qualification in ICT.
We have recently introduced alternatives to voluntary
redundancy and the emphasis has shifted to redeployment,
retraining and skills management. We have, for example, developed
an innovative scheme in which BT employees are placed with other
organisations to work outside BT to help develop their skills. We are
working with an external recruitment agency to use their network
to maximise these opportunities. As our skills requirements change,
so those people can be brought back in house.
Reward and recognition
We conduct a review of salaries every year. The 2009 review took
into account the current difficult economic climate, market
conditions and the need to maintain a sustainable and competitive
cost base. Following discussions with our trades unions, BT has
advised all employees – including senior executives – that there will
be no increases to salary in the UK arising from the 2009 review.
This principle will be followed as closely as possible in all other
countries in which we operate.
Around 40,000 managers are eligible for variable, performance-
related bonuses. The long-term incentives for our most senior
managers are linked to BT’s total shareholder return performance
measured over a period of three years. For Openreach senior
managers, the key measure is Openreach’s performance over a
three-year period. For 2009, our bonus scheme was restructured to
improve alignment to overall business results and affordability.
Employees outside the UK receive an annual award of free BT
shares or a cash equivalent depending on local legal and/or
regulatory requirements. In the UK, employees receive free
broadband. Employees in more than 25 countries also have the
opportunity to save to buy BT shares at a discount to the price at
the start of the savings period. Under the BT Employee Share
Investment Plan, UK employees can buy BT shares from their
pre-tax and pre-National Insurance salaries. More than 50% of
eligible employees participate in one or more of these plans.
Pensions
Most of our UK employees are members of a pension scheme,
either the BT Pension Scheme (BTPS), a defined benefit scheme, or
until recently, the BT Retirement Plan (BTRP), a money purchase
scheme. The BTPS was closed to new members on 31 March 2001
and the BTRP on 31 March 2009.
During 2009 we conducted a review of our UK pension
arrangements, including extensive consultation with the trade
unions and employees. The aim was to ensure the schemes remain
flexible, fair and sustainable for the long term.
Changes to future benefit accruals under the BTPS were effective
from 1 April 2009. Benefits built up before 1 April 2009 remain
linked to final pensionable salary. The changes include increasing
the normal retirement age to 65, moving to a career average
revalued earnings basis, changes to member contributions and
ceasing to contract out of the State Second Pension.
The BTPS has around 64,000 active members, 181,000
pensioners and 96,000 deferred members.
The BT Retirement Saving Scheme was set up on 1 April 2009 as
a successor to the BTRP and the Syntegra Limited Flexible Pensions
Plan (SLFPP). It is a contract-based, defined contribution
arrangement, which means that what the pension members receive
is linked to contributions paid, the performance of the fund and the
annuity rates at retirement, rather than their final BT salary. Former
BTRP and SLFPP members are being invited to transfer their
accumulated assets to this scheme. All these pension schemes are
controlled by independent trustees.
We have reached agreement with the Trustee of the BTPS that
deficit contributions of £525m per annum will be made in cash, or
in specie, over the next three years. This agreement has been
approved by the Pensions Regulator. See Pensions in the Financial
review on page 42 for further details.
Flexibility and diversity
We continue to create an inclusive working environment in which
employees can develop their careers regardless of their race, sex,
religion/beliefs, disability, marital or civil partnership status, age,
sexual orientation, gender identity, gender expression or caring
responsibilities. This inclusiveness is supported by our flexible
working arrangements.
Examples of diversity include the fact that 22% of our workforce
is female and women hold 21% of our top 400 leadership roles. In
addition, more than 10% of our most highly rewarded people in the
UK are from an ethnic minority background. Our policy is for people
to be paid fairly regardless of gender, ethnic origin or disability.
We work with specialist recruitment agencies to attract people
with disabilities to work for BT, and in partnership with Remploy, we
run a retention service to ensure that talented people can stay with
us even if their capabilities change.
Outside the UK, we are working to ensure that our policies and
practices are tailored to address legislation country by country, as
well as respecting cultural differences.
Health and safety
The health and safety of our people are of paramount importance
and we continue to seek improvements by focusing on
behavioural/lifestyle change.
More detailed information on employee engagement, our health
and safety performance and diversity in BT can be found in the
chart on pages 24 and 25.
Employee communications
Employees are kept informed about our business through a wide
range of communications channels, including our online news
service, email bulletins, webchats and webcast briefings and a
printed publication.