Making an impact that matters for a lifetime

The Deloitte Pensions Master Plan provides the innovative platform for the BT Hybrid Scheme – winner of the Pension Scheme Innovation Award at the 2021 Pensions Age Awards

BT has one of the largest private sector defined benefit schemes in the UK – the “BT Pension Scheme”. When the Company closed that scheme to future accrual in 2018 and agreed to launch a new hybrid pension scheme to be offered to 18,000 former members, it challenged its advisers to deliver a tech-enabled, cost-efficient pension scheme fit for the 21st century.

Working with Deloitte, a new optional defined benefit and defined contribution hybrid scheme, based on the innovative Deloitte Pensions Master Plan, was developed under a challenging timeline - from concept to member launch took just 9 months. This hybrid scheme – the BT Hybrid Scheme – saw its first full year of operation in 2020.

The performance on all facets of the BT Hybrid Scheme over 2020 demonstrates that the innovation inherent in its design is now delivering strong outcomes for all stakeholders – and for members in particular.

Investment cost efficiency

For a new pension scheme, initial investment costs for defined benefit assets measured on a per-member basis can be high until the scheme asset base slowly builds up.

It was with this in mind that the BT Hybrid Scheme was designed to allow for economies of scale from day one. Using the innovative Deloitte Pensions Master Plan platform (with assets exceeding £1bn) the scheme immediately accessed the significant cost efficiencies of a multi-billion pound pension scheme despite starting from a zero base.

This has meant that in 2020, investment related costs for the defined benefit assets of the BT Hybrid Scheme were significantly below the market average for a scheme of comparable size.

Having reached union agreement to introduce a hybrid pension scheme for non management employees, we challenged our partners to deliver a cost-effective, technology led solution. We wanted the solution to set a high bar in governance, whilst ensuring that governance budgets were focused on activities that have maximum impact on the member experience, member understanding, member outcomes and, ultimately, member satisfaction. We’re more than pleased with the outcome – from our perspective the BT Hybrid Scheme is delivering cost clarity, cost stability and value for money, whilst at the same time enabling high levels of member engagement.

Kerry Shiels, Pensions Director, BT Group

Member engagement

From the outset, the BT Hybrid Scheme implemented a bespoke tech-enabled pensions solution to enhance the member experience. The member portal, built using industry-leading pensions technology, has the following features:

  • It is web accessible via Single Sign On from the BT benefits platform (i.e. there is no need for a separate “pensions” password)
  • It brings together both DB and DC information in a single place for members
  • Benefit calculations are fully automated – members are able to see details of their benefits with a single click

Over a third of the BT Hybrid Scheme membership accessed their member portal in Q3 2020. This represents terrific engagement for a UK pension scheme – with the ready access to information delighting both BT and employee representatives.

High quality services

The BT Hybrid Scheme aims to deliver first class services for members through the high quality actuarial, investment and administration services provided by Deloitte’s pensions advisory team and Standard Life.

Deloitte and Standard Life liaise with BT Plc to facilitate the smooth administration of the defined benefit and defined contribution sections – this is largely undertaken via monthly automated data flows between the relevant parties. This minimises manual intervention and reduces the need for members to provide additional data at various points, for example on leaving active service.

Both Deloitte and Standard Life have detailed Service Levels Agreements (SLAs) in place with the scheme which set out the agreed turnaround times for all types of administration service provided. The scheme sets a minimum target for completion of work within the agreed timeframes and performance against standards is reported to the Trustee on a quarterly basis – the latest data shows that performance over 2020 was over 99%. This represents an outstanding achievement from the providers – and is also reflective of the efficiency enabled by innovative design and effective technological implementation.

Dealing with COVID-19

The unique circumstances of 2020 tested many organisations, with the BT Hybrid Scheme no exception.

The automated and online nature of many of the key operational interactions in the scheme meant that service to members continued uninterrupted across the year, despite, for example, administration teams working from home rather than in the office.

BT Hybrid Scheme’s investment strategy also proved resilient in the face of the market volatility observed in Q1 & Q2 2020, with the DB section remaining broadly fully-funded across the year.

We are proud to have helped BT deliver its comprehensive pensions change project. The impressive performance of the BT Hybrid Scheme over 2020 demonstrates how innovative design, combined with high-quality service provision, can deliver strong member outcomes despite the most challenging of circumstances

Andy Mewis, Deloitte Pensions Partner for the BT Hybrid Scheme

The BT Hybrid Scheme stands out as a role-model scheme for 21st century pension provision. The exciting, innovative design, combined with outstanding technological implementation, means that over 2020 we really did see best-in-class delivery for members.

Mike Roberts, Principal of PAN Trustees and Trustee of the BT Hybrid Scheme

The BT Hybrid Scheme model shows how the Deloitte Pensions Master Plan enables small pension schemes to achieve the efficiencies and economies of scale which have historically only been available to their larger counterparts. We are seeing increased interest in such models from across the pensions industry.

Mark McClintock, Deloitte Partner, Deloitte Pensions Master Plan

Good governance

BT has always driven high standards of governance. With the BT Hybrid Scheme, it has been able to blend the direct involvement of BT's strong in-house team with the transparency, checks and balances that Deloitte embedded in its Master Plan programme.

By having a professional independent trustee firm acting as Section trustee - PAN Trustees - with two of the UK's most experienced trustee directors representing them, the day to day governance is tightly controlled. There is then the Scheme Trustee sitting above this, to ensure that the structure, transparency and integrity of the scheme is maintained.


Over 2020 the performance of the BT Hybrid Scheme on the key metrics of value for money, member engagement and service to members was outstanding.

The BT Hybrid Scheme has proved to be an innovative solution to a clear corporate pensions challenge. In 2020 it showed that its strong operating model works well in adverse conditions.

The 2021 Pensions Age Award for Pension Scheme Innovation is recognition of the BT Hybrid Scheme as one of the most efficient and innovative plans in the UK.

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