BT Begins Pension Deficit Pay-Off
Under the recovery plan BT will make a lump sum payment of £2.0bn into the Scheme before the end of March 2012, from existing cash resources of £1.5bn supplemented by recent borrowings, followed by nine deficit payments of £325m in March of each year from 2013 to 2021.
The 2011 valuation has been carried out at 30 June 2011 rather than 31 December 2011, the latest allowable date. This has enabled the valuation to be largely completed to allow a lump sum payment to be made prior to the end of BT’s 2012 financial year. Undertaking the valuation at 30 June 2011 has also reduced the uncertainty arising from trying to assess long-term pension liabilities given the current dislocation in the gilts market as a result of quantitative easing and issues in the Euro zone. Future triennial valuations will also be based on a June valuation date as this will enable the Trustee and BT to complete the valuation within BT’s financial year.
BT has also agreed with the Trustee other protections as detailed in the notes to this release. In addition, in order to provide greater certainty, a schedule of future potential payments which will depend on the outcomes of the next triennial valuations in 2014 and 2017, has been agreed by BT.
BT Group plc (NYSE: BT; London: BTA)