UK - The BT Pension Scheme shortfall shrank £1.5bn ($2.4bn) in Q4 last year, helped by a £1bn increase in asset values and a £525m deficit payment, according to its quarterly report.
The scheme's deficit fell from £5.2bn at the end of September to £3.7bn gross of tax at the end of 2010.
Scheme assets were valued at up to £36.4bn at the end of December - an increase of £1.1bn from March last year. The value of liabilities decreased by £3bn to £40bn.
The firm said the reduction in liabilities includes the £2.9bn effect of the RPI/CPI indexation switch (Global Pensions: 4 November 2010).
The funding position was also helped by a pension deficit payment of £525m last year. BT said this reflected improved profitability and working capital, partially offset by higher capital expenditure.
BT chief executive Ian Livingston said: "These results show that we are making progress on a number of fronts. There is always more to do but our performance underpins our outlook for this year and the period to 2012/13."
BT calculated the sums using the IAS19 accounting standard, with scheme liabilities calculated on the basis of a AA bond rate of 5.40% and future RPI inflation expectations of 3.35%.
The positive financial picture for the fund will add to optimistic mood following last year's High Court decision, which confirmed the scheme deficit is covered by a Crown Guarantee - meaning the government would have to foot the pension bill if the firm went bust (Global Pensions: 21 October 2010).
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