UK - The BT Pension Scheme (BTPS), the UK's largest pension fund, has seen its deficit fall to £1.4bn (€1.5bn) according to the telecoms company's latest quarterly results.

The scheme's funding shortfall fell by £4.3bn on an IAS 19 basis, with assets now valued at £37bn at the end of March, an increase of £1.7bn.

BT noted that the improvement was partially due to asset returns, but was also aided by £1bn deficit reduction payments over the last 12 months. In March, it brought forward its end of year payment in an effort to offset a tax increase, saving £20m.

Additionally, the company announced that an ongoing review by the Pensions Regulator (TPR) regarding its funding valuation and recovery plan filed in 2008 had been put on hold due to the court case surrounding the nature of the Crown Guarantee.

The Crown Guarantee states that, the UK government will assume responsibility for pension fund liabilities should BT become insolvent.

Last year, BTPS trustees launched and won a court case to seek clarification on the extent of the guarantee and whether it extended to all scheme members, or simply those employed by BT prior to its privatisation.

In its results, the company said: "The Pensions Regulator's review of the 2008 BTPS funding valuation and recovery plan is now on hold and is not expected to recommence until the outcome of the final court decision, including any potential appeals, is known on the Crown Guarantee."

BT added that it did not expect the review to resume until after the scheme's next triennial valuation, due this December.

BTPS's deficit has fallen sharply over the last few years, peaking at around £9bn in 2008 and since the falling as a result of asset returns, benefit reduction payments agreed under the recovery plan and a shift from the retail price index to the consumer price index as a measure of indexation.

Topics