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Member, Beacon International Group, Ltd.
LONDON--Two of the United Kingdom's largest occupational pension plans announced this week that they face funding deficits.
British Telecommunications Group P.L.C. said it faces a shortfall of about £6.32 billion ($9.98 billion) in its pension fund. As of March 31, the fund had assets of £21.50 billion ($33.95 billion), liabilities of £30.50 billion ($48.12 billion) and a tax asset of £2.71 billion ($4.28 billion).BT said that, starting in December, it would increase annual deficiency payments by £32 million ($50.5 million), to £232 million ($366.3 million), to make up the shortfall.
In addition, Royal Mail Group P.L.C., the main U.K. postal service, announced that its fund was short by £4.6 billion ($7.26 billion) as of March 31. Royal Mail said the fund had assets of £12.1 billion ($19.1 billion) and liabilities of £16.7 billion ($26.37 billion). It said it would boost its annual contribution by £100 million ($157.9 million), to £265 million ($418.4 million).
The disclosures were made under a new accounting rule, Financial Reporting Standard 17, which requires companies to set out on their balance sheets the assets and liabilities of their pension plans. FRS17 is being phased in gradually, with full implementation set for 2005.