You are here: Home - Uncategorized -

BT pensions scheme in a hole

0
Written by:
19/12/2006

Telecoms company BT has announced that its pension fund deficit has widened to £3.4bn and, after taking pension advice, it will increase its contributions next year to try to make up the shortfall.

From 1st January 2007, BT proposes to make annual payments of £280m into its pension fund for a decade, with a £500m upfront ‘deposit’, which it hopes will remedy the damage. These annual payments comprise 13.5% of employer’s contribution, up from 12.2%, while employee contributions remain fixed at 6%.

The deficit has been highlighted in the past few weeks as BT has recently adopted a new accounting method, which has tipped the pension fund from a surplus to a significant deficit. BT’s chairman, Sir Christopher Bland, said the announcements were “a fair and prudent deal for pensioners and shareholders”.

He also emphasised that the planned payments “reconfirmed that BT stands fully behind its pension obligations”, and that it is committed to its pension fund. But he also conceded that people living longer and only moderate UK investment returns in recent years, have made it hard for the pension fund to build up value.

The BT scheme has a total of 350,000 members, including 177,000 pensioners and 77,000 members of staff who are still making contributions to the pension fund.

 

 

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Court dashes Christmas hope for Farepak losers

Customers of the collapsed Christmas savings club Farepak who were hoping that a High Court ruling would entitle them to...

Close