The shortfall at the 340,000-member plan, the U.K.’s largest pension fund, is the largest among any U.K. private-sector pensions, according to a news report by the Yorkshire Post newspaper.
Rod Kent, chairman of the BT pension trustees, told the Post there has been “exhaustive” efforts over the last 18 months to reach the funding milestone at a time of unprecedented financial turbulence, and that the funding plan “secures significant additional support to the benefit of (plan) members, underpinned by a strong sponsor.”
BT said an earlier plan was “prudent”, but
that the Pensions Regulator had “substantial concerns” over some
areas of that agreement, which is still under review by the pensions watchdog. Plan trustees had previously backed the earlier plan to pay £525m a year for
three years, which would rise to £583m in the fourth year and grow at a rate of
three per cent annually after that.
According to the Post, BT chief executive Ian Livingston sought to assure that improvements to the business are providing enough cash to support the pension plan, while also allowing the group to continue shareholder dividend payouts, to invest in the business, and to reduce debt.
Its pension assets rose by 10% over the past year, to £34 billion, while BT also estimated that a “median estimate” calculation would have put the deficit at closer to £3 billion, the newspaper reported.