UK - British Telecom pension scheme deficit grew by £3bn (US$5bn) over the last quarter after the telecoms giant reviewed its accounting assumptions.
According to BT's quarterly financial results, released today, the UK's largest scheme had a net deficit of £5.8bn at June 30 - compared with £2.9bn at March 31.
It said the dramatic loss in value was due to an adjustment in the bond rate value and inflation rate assumption used to discount its liabilities.
The valuation of liabilities at June 30 is based on a AA bond rate of 6.2% and an inflation rate of 3.25%, compared with 6.85% and 2.9% at March 31.
This caused the value of liabilities to rise from £33.1bn to £38.3bn.
In contrast, the value of assets rose from £29.3bn to £30.4bn over the second quarter, but this increase of £1.1bn was offset by the deterioration in the liability position.
A BT spokesperson said: "The deficit is a result of a fall in the bond rate and the increase in the inflation, which is not a measure that determines our top up payments and so we will continue to pay £525m per annum over the next three years.
"IAS 19 is a volatile valuation as it is demonstrated by the fact that it has improved by £800m in just the last three weeks."
A statement by The Pension Regulator made in May and reiterated today said BT and the trustee of the BT scheme remained in discussions with TPR regarding the triennial funding valuation and its underlying assumptions as at 31 December 2008.
TPR also said these discussions would not affect the commitment by BT to make deficit contributions equivalent to £525m per year.
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