UK incumbent BT has paid its next pension deficit contribution nine months earlier than planned “as it is economically beneficial to do so and utilises existing cash deposits”, the company stated.
BT announced it had made an accelerated payment of £505m…
UK incumbent BT has paid its next pension deficit contribution nine months earlier than planned “as it is economically beneficial to do so and utilises existing cash deposits”, the company stated.
BT announced it had made an accelerated payment of £505m to represent the actuarial value of the £525m due to have been paid to the Trustee of the BT Pension Scheme (BTPS) in December 2011.
The company added that the payment will also be subject to a 28% corporation tax rate, as opposed to the 26% rate that will apply in the 2011/2012 financial year. The timing of the tax deduction will also be brought forward to the first half of the 2011/2012 financial year.
Back in February 2010, BT and BTPS agreed a triennial actuarial funding valuation as at 31 December 2008 and the latter’s associated 17-year recovery plan.
BT agreed to make payments of £525m per annum for the first three years of this plan. The previous two installments were made in December 2009 and December 2010.
Both groups will decide its next triennial funding valuation on 31 December 2011.
According to the most recent analysis based on the Consumer Price Index, BT’s pension fund deficit is worth around £2.9bn.
