BT is to pay a lump-sum payment of £2 billion into its final salary pension scheme before the end of March to halve the scheme’s £4.1 billion deficit.
The payment will be followed by nine payments of £325 million in March of each year from 2013 to 2021.
The telecommunications firm has agreed the payment with the trustee of its scheme and it is based on the same methodology as the previous valuation at 31 December 2008, when the deficit was £9 billion.
The final certification of the 2011 valuation is expected in May 2012.
Ian Livingston, chief executive at BT, said: “I am pleased that we have been able to reach an agreement with the trustee.
“This agreement, under which the company makes an immediate contribution to the scheme of almost half of the deficit, reflects BT’s financial strength and re-affirms our commitment to the scheme.
“BT’s long-term sustainable cash generation has improved significantly since the 2008 valuation and we remain focused on improving BT’s financial strength, investing in our future and enhancing shareholder returns.”
Paul Spencer, chairman of the BT Pensions Scheme (BTPS) Trustee, added: “Since the last valuation, BT has had a successful period, enabling it to pay a £2 billion upfront payment, and eliminate the deficit within ten years.
“The trustee looks forward to working with BT to further enhance the security of our members’ benefits.”
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