31st July 2018 Vikki Massarano comments in Accountancy Daily on BT’s reported £500mn pension deficit error

BT has reported that an accounting error by actuary Willis Towers Watson led to a £500mn underestimation of its pension deficit to the end of March. As of the end of June, the restated deficit stands at £3.9bn net.

BT reports that it has received ‘certified assurance’ from Willis Towers Watson that the measured extent of the error is accurate. The error itself represents around 1% of the total deficit and is not expected to have an impact on members of the pension scheme.

Vikki Massarano commented:

“Trustees are likely to be more concerned with the scheme specific funding level, although they will consider the impact the error has on the employer covenant.

“This highlights the fact that company accounting figures and the obligations on a company to fund a defined benefit pension scheme can be very different. The amount shown in a company’s accounts may only be the tip of the iceberg.”

Read Vikki’s comments in Accountancy Daily

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