SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
18 December 2006
BT Group plc
(Translation of registrant's name into English)
BT Centre
81 Newgate Street
London
EC1A 7AJ
England
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form 20-F..X... Form 40-F.....
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes ..... No ..X..
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82- ________
Enclosures: 1. BT Pension Scheme announcement made on 18 December 2006
DC06-675 December 18, 2006
BT AND TRUSTEES ANNOUNCE AGREEMENT ON TRIENNIAL FUNDING VALUATION OF THE BT
PENSION SCHEME
BT and the Trustees of the BT Pension Scheme (BTPS) today announced that they
had reached agreement on the triennial funding valuation of the BTPS. Under a
new and more conservative actuarial methodology, consistent with regulatory
guidance, the deficit as at December 31 2005 has been calculated as GBP3.4bn.
Had the previous valuation approach been used on this occasion, the Scheme would
be in surplus. BT will make deficit payments equivalent to GBP280m per annum for
10 years with the first three years instalments paid up front.
Key features of the agreement are:
-An advanced payment of GBP840m, representing three years' instalments of
GBP280m, into the scheme by 30th April 2007 - GBP500m of which is to be paid
in December 2006.
-Payments of GBP280m pa in 2009-2015 inclusive.
-A "true-up/true down" agreement has been reached to adjust post 2008
Company contributions depending on investment performance. This for example
gives the Trustees insurance should investment performance not be in line
with expected returns. Subject to Trustee agreement, it gives the company a
benefit where investment returns exceed 3.2% real.
-Employee contributions will remain at 6%. Joint employer/employee
contribution will increase from 18.2% to 19.5% from 1 January 2007.
Sir Christopher Bland, BT Chairman said "This is a fair and prudent deal for
pensioners and for shareholders, which re-confirms that BT stands fully behind
its pension obligations. The Scheme is well-managed and assets have grown very
strongly in recent years".
Sir Tim Chessells, Chairman of BTPS Trustees said: "This agreement offers
balance and certainty. It secures additional strong support to the benefit of
pensioners, is consistent with the interests of scheme members and is further
underpinned by having a financially strong sponsor".
Hanif Lalani, BT's Group Finance Director said: "Considerable extra prudence has
been built into the deficit calculation since 2002. We are wholly comfortable
with this agreement, and there is no impact on our profit and loss account."
Notes to editors:
1. The BT Pension Scheme (BTPS) is a defined benefit (DB) scheme and was closed
to new members on 1 April 2001. A defined contribution (DC) scheme, the BT
Retirement Plan, is in place for those joining since 1 April 2001.
2. Funding valuation: The previous full triennial valuation - as at 31 December
2002 - concluded that there was a funding deficit, which BT agreed to repay
at GBP232m per annum over fifteen years. These sums were additional to
regular employer contributions.
3. The BTPS had assets at 31 December 2002 of GBP23bn, rising to over GBP34bn
at 31 December 2005 and to GBP36bn by 30 September 2006.
4. Scheme assets represent 91% of liabilities at 31 December 2005. These
liabilities have been expressed at present value using more prudent discount
rates than in 2002. The new discount rates average 2.5% per annum real over
the next three years as opposed to 4.5% per annum real in 2002.
5. Accounting valuation: BT's IAS19 accounting deficit in relation to the BTPS
at 31 December 2005 was GBP4.0bn (GBP2.8bn net of tax), and GBP2.8bn (GBP2bn
net of tax) as at 30 September 2006.
6. There is no impact from this agreement on the company's profit and loss
account.
7. The "true up/true down" agreement between the company and trustees means
that if the actual investment return from scheme assets over the period
between triennial valuations is below 3.2% real per annum, BT will make
further cash contributions to BTPS. If investment returns exceed 3.2%, BT's
future deficit contributions will be reduced provided Trustees agree. In
doing so, Trustees must of course act in accordance with relevant regulatory
guidance, notably that any shortfall should be eliminated as quickly as the
employer can reasonably afford after assessing the employers' covenant. The
adjustments take effect post 2008 and are capped each way at GBP280m p.a.
8. The existence of the Crown Guarantee, given to BT on privatisation in
relation to pensions liabilities for those joining BTPS before 6 August
1984, has not been taken into account in determining the valuation results.
9. Liabilities assumptions have been updated since 2002. These include the
following mortality assumption:
+ -average life expectancy after retirement at 60 years:
Males 23.8 years
Females 25.4 years
- future improvement every 10 years of about 1 year
Inquiries may also be made to the BT Group Newsroom on its 24-hour number: 020
7356 5369. From outside the UK dial + 44 20 7356 5369. All news releases can be
accessed at our web site: http://www.bt.com/newscentre
About BT
BT is one of the world's leading providers of communications solutions and
services operating in 170 countries. Its principal activities include networked
IT services, local, national and international telecommunications services, and
higher-value broadband and internet products and services. BT consists
principally of four lines of business: BT Global Services, Openreach, BT Retail
and BT Wholesale.
In the year ended 31 March 2006, BT Group plc's revenue was GBP19,514 million
with profit before taxation of GBP2,040 million.
British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group and
encompasses virtually all businesses and assets of the BT Group. BT Group plc is
listed on stock exchanges in London and New York.
For more information, visit www.bt.com/aboutbt
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
BT Group PLC
(Registrant)
By: /s/ Patricia Day
--------------------
Patricia Day, Assistant Secretary.
Date: 18 December 2006