BT’s defined benefit IAS 19 pension deficit decreased by £300m in quarter three of 2017, from £9.6bn to £9.3bn, gross of tax.

It comes as reports emerge that BT is planning on closing its DB pension scheme to future accrual. In its half year results, published today, the company said a review of its future pension benefits continues and it expects to consult with affected employees on the proposed changes shortly.

“We continue to review the future pension benefits under our main DB and DC schemes in the UK, with the objective of providing fair, flexible and affordable pensions. Discussions with our unions are continuing and we expect to undertake a 60-day consultation with our affected employees shortly. A court hearing will also take place in early December to determine the appropriate approach for the future indexation of benefits for members of Section C of the BTPS.

BT said the fall in the deficit is reflects a fall in liabilities, driven by an increase in the discount rate, partly offset by a fall in the assets. Furthermore, BT said its triennial valuation is underway and discussions continue with the BT Pension Scheme trustee.

“We are considering a number of funding options to address the deficit, including arrangements that would give the BTPS a prior claim over certain BT assets. We still expect to complete the triennial valuation in the first half of the 2018 calendar year,” it said.

Commenting on BT’s results, The Share Centre investment research analyst Helal Miah said: “The ongoing troubles at telecoms giant BT have been reflected in the latest Q2 trading update released this morning. Reported revenues fell by 1 per cent to £5.95bn, and this was particularly affected by the Global Services division.

"Thankfully, its consumer focussed businesses such as EE helped offset sales figures to an extent. However, adjusted operating profits were down by 4 per cent to £1.8bn, reflecting investments in sports rights, higher pension costs, business rates and the decline in Global Services."

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