German telecommunications giant Deutsche Telekom has reported a €1bn fall in its provisions for pensions and other employee benefits in the first half of 2025.

This equates to a 31 per cent drop from the €3.2bn reported at year-end 2024, bringing the total down to €2.2bn.

Its interim results revealed that the decline was driven primarily by an actuarial gain of €0.9bn, recognised directly in equity, reflecting a rise in the fair value of plan assets and an increase in the discount rate compared with year-end 2024.

The fall follows a €0.9bn reduction in 2024 – a 22 per cent decrease – when provisions fell from €4.1bn at the end of 2023 to €3.2bn by 31 December 2024.

In that year, strong plan asset performance offset the impact of a lower discount rate, which increased the present value of obligations.

Deutsche Telekom’s pension arrangements are governed by a global pension policy designed to harmonise benefits and reduce risk.

The group has largely shifted from defined benefit to defined contribution schemes, though it still manages closed legacy plans in Germany, including obligations inherited from the former Deutsche Bundespost system.

It also maintains international schemes in the US, Switzerland, and other jurisdictions. The company operates under brands including T-Mobile and serves customers across Europe, the United States and other international markets.

German obligations are partly funded via a contractual trust arrangement, Deutsche Telekom Trust e.V.

For civil servants, the company makes statutory contributions – currently 33 per cent of pensionable gross pay – to the Civil Service Pension Fund.

However, it has no further obligations for these pensions.

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