BT to accelerate pension deficit reduction

Telecoms giant BT is feeling flushed enough to bring forward the next payment in its pension deficit reduction programme.BT has made a cash payment of £505m into the BT Pension Scheme (BTPS) in place of the £525m due to have been paid in December 2011, a saving of £20m. In addition, the payment will be tax deductible at a corporation tax rate of 28%, rather than the 26% which will apply in the 2011/12 financial year, and the timing of the tax deduction will be brought forward to the first half of the 2011/12 financial year, BT said.The early payment does not affect the company's previously announced outlook for free cash flow.BT has committed to make payments of £525m a year over a three year period as part of a 17-year plan to wipe out its pension scheme deficit.---jh