BT pension deficit increases by £500m in Q3

BT’s defined benefit pension deficit increased by half a billion pounds (£500m) in the three months to 31 December 2018, ending the year on £5bn (net of tax).

Publishing its third-quarter results, BT revealed that the estimated deficit has increased from £4.5bn to £5bn over the third quarter (net of tax) or £5.3bn to £6bn (gross of tax). It said the increase mainly reflects a fall in the real discount rate and a fall in assets.

BT also referenced the court case in January 2018, in which the High Court ruled that it is currently not possible to change the index used to calculate pension increases for Section C members of the BTPS. The decision was appealed and on 4 December 2018 the Court of Appeal handed down its judgment which upheld the High Court's decision.

Furthermore, in November 2018, the High Court ruled against BT in the Judicial Review proceedings in relation to a decision by HM Treasury concerning public sector pension increases.

BT is seeking permission to appeal both judgments.

In addition, with regards to the High Court ruling on the Lloyds Banking Group case, it said it expects the impact of the decision to cost around £100m.

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