BT Pension Scheme, London, saw its deficit fall 26% over the three months ended June 30 to £3.9 billion ($5.1 billion) net of tax, sponsoring employer BT Group PLC said.
The telecom giant's latest financial update showed that gross of tax the deficit fell 28% to £4.6 billion.
BT said the estimated reduction "mainly reflects the deficit contributions of £2 billion." The fund also recorded a £300 million decline in liabilities, which was more than offset by a £500 million drop in assets for the pension fund, with about £50 billion in assets.
The decline in liabilities was attributed to an increase in the discount rate, which reduced the figure by about £700 million. However, this reduction was "partly offset by an approximate (£500 million) correction of an error made by our independent external actuary, Willis Towers Watson, in their calculation" of the fund's accounting deficit as at March 31.
"We have received certified assurance from the actuary that their quantification of their error is accurate and that there are no other errors. ... We are separately undertaking further review procedures around their calculation," BT said.
The correction amounts to less than 1% of the approximate total of £57 billion in liabilities. It has no effect on the fund's latest valuation made in 2017 and no effect on cash contributions made by the employer or participants, BT said.
BT in May agreed a 13-year recovery plan with the trustee of the pension fund to help plug what was a £11.3 billion deficit as at June 30, 2017. As part of the plan, BT will contribute £4.5 billion to the pension fund by the date of the next valuation, which will take place June 30, 2020.
BT announced earlier this year it was freezing two of the three sections of the BTPS, representing more than 99% of active participants, on June 30.
