Taxpayer Underwrites BT Pension Black Hole

BT has admitted that a “significant proportion” of its near-£5bn pension liabilities are underwritten by the taxpayer, although it refused to give details.

The disclosure could heighten the interest of private equity firms who have been deterred from making a move on BT by the size of its pensions black hole.

BT said it was “no secret” that it has a crown guarantee for part of the pension liabilities of its defined benefit scheme, which closed to new members on April 1 2001. It said the guarantee covered liabilities in relation to pensioners and members of the scheme at privatisation in 1984.