23 March 2012

BT Pay £2bn Into Pension Fund

BT has announced it will £2 billion into its pension fund as part of a plan to clear its deficit.

The telecoms group say the £2bn injection, the first step of a nine-year plan, will almost half its current deficit of £4.1bn. The deficit has already been reduced from £9bn recorded in 2008.

BT, which has been dogged in recent years by the pension fund deficit and the drag it placed on dividend payouts, has thrashed out a deal with its trustee. It will make a lump sum payment of £2bn before the end of March, followed by nine smaller payments of £325m in March of each year until 2021.

"I am pleased that we have been able to reach an agreement with the trustee,” BT's chief executive, Ian Livingston, said. “This agreement under which the company makes an immediate contribution to the scheme of almost half of the deficit reflects BT's financial strength and reaffirms our commitment to the scheme.

He added: "BT's long-term sustainable cash generation has improved significantly since the 2008 valuation and we remain focused on improving BT's financial strength, investing in our future and enhancing shareholder returns."

(H)