BT reduces pension funding deficit to £3.7 billion with scheme expected to be fully funded by 2030
Despite the shortfall reducing, BT announced that its yearly contributions to the pension scheme, which is one of the biggest in the UK, will remain the same, with £600m paid in each year until March 2023. It will then make a final payment of £490m million.
Otto Thoresen, BT Pension Scheme chairman, said: “The BT Pension Scheme continues to be on track to fulfil its commitments to members, despite high levels of macroeconomic volatility and uncertainty.
“Our deficit is reducing, funding levels have improved and we remain on course to be fully funded by 2030.”
BT Group will also continue to make payments of £180m each year under the asset-backed funding arrangement agreed at the 2020 valuation.
Simon Lowth, BT Group Chief Financial Officer, said: “I am pleased that the BTPS continues to deliver in line with the long-term plan, despite the uncertainty and headwinds observed since 2020. Building on the framework agreed at the 2020 valuation allowed for a swift conclusion of the 2023 valuation.
“The agreement allows us to deliver on our strategic initiatives such as investing in our networks and transforming our business. And it is consistent with our funding priorities of investing in value enhancing opportunities, supporting our pension funds, paying progressive dividends and maintaining a strong balance sheet."
Earlier this month, BT announced that its pre-tax profits had risen 29 per cent on this time last year, landing at £1.07bn for the six months ending 30 September. Revenue was recorded at £10.4 billion, up from £10.36bn the year prior.
The Group’s adjusted EBITDA grew six per cent to £4.09bn.
Earlier this year BT announced that current chief executive Philip Jansen would step down, with Allison Kirkby, current chief executive and president of Swedish telecommunications firm Telia Company set to take over. Shares in BT fell 1.79 per cent on Tuesday afternoon following the announcement to 120.75p.