Financial Times FT.com

Companies face up to the real costs of pensions

By Norma Cohen and Jennifer Hughes

Published: February 18 2008 02:00 | Last updated: February 18 2008 02:00

Nearly two decades ago, when BT Group badly needed to restructure its workforce, the UK's privatised telecommunications carrier offered generous early retirement benefits to encourage staff to go voluntarily.

Thousands of them did, helping BT to recover its profitability. But that was because a portion of the cost was hidden in the company's pension scheme, which today has total liabilities of nearly £38bn ($75bn, €51bn).

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