BT has begun negotiations to allow its pension scheme members to purchase stakes in its communications network to increase the security of their retirement savings, according a report from the Sunday Telegraph.

The potential arrangement could see the scheme’s 290,000 active, deferred and pensioner members owning portions of the telecoms giant’s £20bn-valued network so that their pensions would remain funded even if BT encountered financial difficulties, in a move that had been discussed with trustees in 2017.

Citing city sources, the report added that talks were at an early stage and were not guaranteed to result in a deal, with the scheme’s triennial valuation having recently begun.

When the strategy was previously mooted three years ago, BT instead opted to borrow £2bn for deficit reduction contributions (DRCs) against a deficit of £11.3bn, while also agreeing annual DRCs of £900m until 2030.

The Sunday Telegraph report speculated that allowing pension scheme members to buy into its infrastructure was a way for BT to secure their retirement income without having to take on more debt, with the company having already cancelled its dividend in the midst of the Covid-19 pandemic.

In May 2020, the telecoms company’s full year results valued the scheme’s deficit at £1.1bn, down from £7.2bn the year before, after liabilities dropped from £59.4bn to £53.3bn and assets remained unchanged.

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