Ofcom rules out changes to BT pensions funding

23rd Jul 2010 07:15

Telecoms regulator Ofcom has ruled out changes to BT's funding that would have allowed it to raise wholesale prices to help close the huge deficit in its pension fund.The telecoms giant had wanted to put wholesale prices up by 4% to help plug the near £9bn deficit in its pension scheme.Ofcom said today that after a period of consultation there was no 'compelling evidence' to change the way it takes BT's pension costs into account when setting regulated charges. At present, Ofcom takes account of ongoing pension service costs, as reported in BT's statutory accounts, but excludes payments made by BT in respect of any pension fund deficit.It started the review last year after BT's deficit soared and the regulator became concerned the size of its pension payments could affect its costs.Rivals had reacted angrily to the possibility of having to pay more for BT's pension scheme. BSkyB, Cable & Wireless and Carphone Warehouse hired an independent researcher to show that BT was responsible for the deficit by not putting enough cash into the fund between 1990 and 2004.