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BT refuses to be drawn on partial buy-out rumours

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  • BT refuses to be drawn on partial buy-out rumours

UK - Both BT and Hermes, investment managers of the BT Pension Scheme, have refused to comment on press speculation that BT is considering a partial buyout of the scheme.

Reports said today that BT had canvassed banks, consultants and buyout groups to provide it with options to help reduce its deficit, and that one of the solutions suggested was a partial buyout.

However neither BT or Hermes would comment on the claims.

The BT Pension Scheme had assets of £30.4bn (€34.7bn) as at 30 June 2009, while its IAS19 position as at the same date was a deficit of £5.8bn net of tax (£8bn gross of tax). This compares with a deficit of £2.9bn net of tax (£4bn gross of tax) as at 31 March 2009.

In May, BT announced that along with the Trustee of the BT Pension Scheme (BTPS), it was in discussions with the Pensions Regulator with respect to the triennial funding valuation as at 31 December 2008. The valuation is due to be agreed by 31 March 2010. (See earlier IPE article: BT told to delay actuarial valuation results)

The company said then: "As BT and the Trustee are at such an advanced stage compared to other scheme valuations and given the uncertain market conditions, the Pensions Regulator wishes to discuss the valuation and underlying assumptions with the Trustee and BT.

"The Pensions Regulator has requested that the valuation and assumptions are not finalised or disclosed in advance of the completion of those discussions. Whilst the valuation is not required to be finalised until 31 March 2010, BT, the Trustee and the Pensions Regulator are keen to complete this as soon as practicable."

BT has also agreed to make deficit contributions equivalent to £525m per annum in cash, or in specie, over the three years to end-March 2012. BT says the Pensions Regulator has confirmed that the agreement will not be affected by these discussions.

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