Bloomberg News

BT May Pay Portion of Pension Deficit Early Within 2012 Review

November 17, 2011

Nov. 16 (Bloomberg) -- BT Group Plc, the U.K.’s largest fixed-line phone company, may pay part of its pension deficit early as it prepares for the latest valuation.

BT, which had a net funding deficit of 2.5 billion pounds ($3.9 billion) at the end of September, will consider making an early payment as part of the actuarial review, Chief Executive Officer Ian Livingston said today at a conference in Barcelona organized by Morgan Stanley.

“That cash is not earning a great return,” Livingston said. While no decisions on pension funding have been made, BT is considering “if you could do a chunk of it at the beginning.”

BT, which reported adjusted free cash flow of 979 million pounds in the first half, is preparing for the triennial assessment of its pension program, which will start at the beginning of next year. Under the prior agreement the London- based company agreed to make annual payments of 525 million pounds through December 2011.

BT said in May that a regulator’s review of the pension funding program was halted, ending a year of talks over the scale of the recovery plan. The watchdog said at the time that it still had “substantial concerns” about an agreement with the trustees of BT’s pension program to pay down the liability.

--Editors: Robert Valpuesta, Kenneth Wong.

To contact the reporter on this story: Jonathan Browning in Barcelona via

To contact the editor responsible for this story: Kenneth Wong at

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