BT (BT.L) is making a payment towards its pension scheme deficit, quicker than anticipated, making a £505 million payment nine months ahead of schedule.

The technology and communications group said it has brought forward to payment of its next deficit contribution from the due date in December 2011 to March 2011, in agreement with the scheme’s trustees.

BT said it took the decision because of the company’s current financial position, which it believed was sufficiently strong to facilitate the payment.

In a statement to the London Stock Exchange, it added, ‘BT has taken the decision to accelerate the payment as it is economically beneficial to do so and utilises existing cash deposits.’

The actuarial value of the payment is actually £525 million.

The payment will be tax deductible at a corporation tax rate of 28 per cent, rather than the 26 per cent, which will apply, in the 2011/12 financial year, and the timing of the tax deduction will be brought forward to the first half of the 2011/12 financial year.

The company confirmed that this early payment does not impact the company's previously announced outlook for free cash flow.

In February 2010 BT and the trustees of the pension scheme announced that they had reached agreement on the triennial actuarial funding valuation as at 31 December 2008 and the associated recovery plan for the scheme.

Under the recovery plan, BT agreed to make payments of £525 million per annum for the first three years of the 17-year recovery plan. The first two payments were made in December 2009 and December 2010.

The next payment was due in December 2011. The next triennial funding valuation will be carried out as at 31 December 2011.