The Great Debate UK

Why BT’s pension line is out of order


REUTERS– Neil Collins is a Reuters columnist. The views expressed are his own –

It is a quarter of a century since the ground-breaking privatisation of BT. Unfortunately, it may not be many more years before a reluctant government is forced to take the company back into state ownership.

The new BT annual report, 169 pages of it, gives only a few hints of the scale of the problem facing what John Ralfe recently described as “a badly run hedge fund that happens to own a phone network”.

Ralfe is an independent consultant and something of a maverick in the arcane world of pension deficits, but he has a point. The directors claim that BT will make enough to grow the (reduced) dividend, invest in the business and support the pension scheme, all at once. It’s far from clear how.