BT Says Pension Deficit $6.7 bln, to up Payments
British telecoms group BT said its pension deficit had risen to 3.4 billion pounds ($6.7 billion) following the introduction of more conservative accounting rules and that it would up payments into the scheme.
The former state monopoly said on Monday it had agreed with its pension trustees to pay 280 million pounds a year into its pension scheme, with the first three payments made upfront.
The payments would have no impact on its profit and loss account, BT said in a statement.
BT is one of several former state-owned firms with large pension deficits, which are treated like debt on corporate balance sheets under new accounting rules.
The firm was announcing the outcome of its triennial pension valuation, giving new figures as of Dec. 31, 2005.
At the previous triennial valuation the pension deficit was 2.1 billion pounds and BT pledged to make annual payments of 232 million pounds into the scheme over 15 years.
BT said on Monday the rise in its pension deficit was due in part to raising its assumptions on life expectancy.
BT shares closed at 315 pence on Friday, valuing the business at about 26 billion pounds.