BT Group PLC reported a 2.6% increase in its pension fund deficit for the quarter ended Dec. 31, but a 14.1% fall in the deficit for the year, to £7.9 billion ($10.7 billion).
The telecom giant said Friday in a financial update that the BT Pension Scheme, London, grew 2.5% to £49.9 billion in assets for the three months ended Dec. 31. Over the year, assets grew 2%.
Calculations using information in the update showed a funded status of 84.7% as of Dec. 31, compared with 82.5% a year earlier.
BT said in the update that the increase in the deficit "mainly reflects an increase in the liabilities," which grew 2.4% compared with figures as of Sept. 30. This was attributed to a change in the discount rate, which stood at 2.35% as of Dec. 31, compared to 2.5% as of Sept. 30.
A triennial valuation is set to be completed in the first half of this year.
The firm said it is considering a number of funding options to address the deficit, "including arrangements that would give the BTPS a prior claim over certain BT assets."
BT is also appealing a decision by the U.K. High Court that ruled the firm could not change the inflation index it uses to calculate pension increases for part of its fund. It is also reviewing the future benefits under its pension and defined contribution plans in the U.K., having completed a comment period with participants. The update said BT is now considering participant feedback.