DC06- 192 April 24th, 2006
Triennial valuation review of the BT pension scheme
BT and the Trustees of the BT Pension Scheme (BTPS) today announced that discussions on the triennial funding valuation of the BTPS (as at 31 December 2005) and the associated funding plan were continuing, and that their conclusions would be announced some time after the preliminary announcement of the BT results for the year to 31 March 2006. In particular, they will examine the implications of recent pensions legislation, regulations and draft guidelines for the Crown Guarantee given on privatisation, and hence for any new funding plan. Further regulatory guidance is also expected within the next few weeks on the funding of Defined Benefit pensions schemes, following a recent consultation.
Sir Christopher Bland, Chairman of BT said: 'BT stands fully behind its pension promise to pensioners and members. The existing Guarantee, which applies only on a winding up of the Company, represents an added reinforcement to the company’s covenant and an extra layer of security for BT’s pensioners. The Scheme is well-managed and assets have grown very strongly in recent years’.
Sir Tim Chessells, Chairman of the Trustees said: 'It is in the interests of all BT pensioners and Scheme members that we understand fully how the Guarantee - which is an important insurance policy for many members - interacts with the new laws.'
Funding valuation
The last full triennial valuation – as at 31 December 2002 - concluded that there was a funding deficit of £2.1 billion, which BT agreed to repay at £232m per annum. This sum is additional to regular employer contributions. The BTPS had assets at 31 December 2002 of £23bn and this had risen to over £34bn at 31 December 2005.
Accounting valuation
BT's IAS19 accounting deficit in relation to the BTPS at 31 March 2005 was £4.7bn (£3.3bn net of tax) and is estimated to have fallen to about £2.5bn (£1.8bn net of tax) as at 31 March 2006.
