BT 2014 Annual Report Download - page 163

160 Financial statements
19. Retirement beneƬt plans continued
A similar mechanism applies based on the decit agreed at the 2017 valuation. If this exceeds the outstanding recovery plan (with the remaining
2011 recovery plan worth about £1.1bn in 2017, based on 2011 discount rates), BT will provide extra payments dependent on the level of the
decit as shown in the table below.
Additional contributions payable
2018
£m
2019
£m
2020
£m
2021
£m
2022
£m
2023
£m
2024
£m
Decit above remaining 2014 recovery plan present value
£nil –––––––
£1.0bn 197 203 209 215 207 213 –
£2.0bn 341 351 362 373 358 369 381
£2.9bn or above 393 404 416 429 670 670 670
A new agreement would cover additional contributions if these are required.
If the decit at 2014 is below the value of the remaining 2011 recovery plan, no additional decit contributions are necessary and the remaining
recovery plan will be revised. Likewise, if the decit at 2017 is below the remaining recovery plan at that time.
Other protection of BTPS member beneƬts
In the unlikely event that the group were to become insolvent there are additional protections available to members
– the Crown Guarantee which was granted when the group was privatised in 1984 and which applies upon the winding up of BT. The scope and
extent of the Crown Guarantee is being claried by the Trustee through the courts. The decision of the High Court issued in October 2010 was
that the Crown Guarantee can cover members who joined before and after privatisation. The Court conrmed that any payments to be made by
the Government must be measured on an annuity basis. In a further High Court decision issued in December 2011, it was decided that the Crown
Guarantee does not cover the benets of members accrued while in service with companies that participate in the BTPS other than BT nor does
it cover benet augmentations granted by BT. The judgments were appealed on 30 April 2014 and a decision from the Court of Appeal is pending.
– the Pension Protection Fund (PPF) may take over the scheme and pay benets to members not covered by the Crown Guarantee. There are limits
on the amounts paid by the PPF and this would not give exactly the same benets as those provided by the scheme.
Other benet plans
In addition to the BTPS, the group maintains benet plans in most other countries with a focus on these being appropriate for the local market and
culture.
After the BTPS, the largest dened benet plan sponsored by the group is a plan in the Netherlands with liabilities of around £120m.
As part of the group-wide restructuring programme, a dened benet plan in the US, with liabilities of £60m, was closed and is being wound up,
resulting in a settlement charge of around £2m. This charge is included as a specic item within restructuring costs (see note 8).
The BT Retirement Saving Scheme (BTRSS) is the largest dened contribution scheme maintained by the group with around 26,000 active members.
In the year to 31 March 2014, the group contributed £97m to the BTRSS.
20. Own shares
Treasury sharesa
Employee share
ownership trustaTotal
millions £m millions £m millions £m
At 1 April 2012 367 (1,018) – – 367 (1,018)
Own shares purchasedb87 (189) 44 (113) 131 (302)
Share options exercisedb,c (131) 363 – – (131) 363
Executive share awards vested (46) 127 – – (46) 127
Other movements (6) 17 8(19) 2(2)
At 1 April 2013 271 (700) 52 (132) 323 (832)
Own shares purchasedb27 (98) 59 (204) 86 (302)
Share options exercisedb,c (66) 172 – – (66) 172
Executive share awards vested – – (49) 133 (49) 133
At 31 March 2014 232 (626) 62 (203) 294 (829)
a At 31 March 2014, 232,487,770 shares (201213: 270,780,954) with an aggregate nominal value of £12m (201213: £14m) were held at cost as treasury shares and 61,313,845 shares
(201213: 51,815,160) with an aggregate nominal value of £3m (201213: £3m) were held in the Trust.
b See group cash Ʈow statement on page 126. In 201314 the cash paid for the repurchase of ordinary share capital was £302m (201213: £302m). The cash received for proceeds on the issue of
treasury shares was £75m (201213: £109m).
c Includes share option exercises in relation to Employee Saveshare Plans and GSOP and G/OP (/egacy Plans). See note 21 for details.
The treasury shares reserve represents BT Group plc shares purchased directly by the group. The BT Group Employee Share Ownership Trust
(the Trust’) also purchases BT Group plc shares.
The treasury shares and the shares in the Trust are being utilised to satisfy the group’s obligations under its employee share plans. Further details
on Employee Saveshare Plans and Executive share plans are provided in note 21.