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BT Pension Fund Seeks to Offload UK Shares

Posted on: Wednesday, 10 May 2006, 15:03 CDT

By Ruth Sunderland, Daily Mail, London

May 9--BT's pension fund is expected to cut its exposure to UK shares as part of a scheme to reduce the risk of not being able to meet its promises to members.

Mark Anson, the new chief executive of Hermes, which manages the scheme, is known to be a fan of using alternative investments such as commodities and hedges to reduce risk.

Chicago-born Anson is formerly chief investment officer of the California Public Employees Retirement System, the US's largest pension fund.

He began a hedge fund programme there and also invested more in private equity and began investing in commodities.

The BT fund last month said it had a £2.5bn deficit, down from £4.7bn. It is paying in extra contributions of £232m a year for 15 years from December 2002. The company has delayed its regular three-yearly valuation by actuaries because of discussions with the Department of Trade and Industry over a "crown guarantee," which covers some of the fund if the company goes under.

BT argues its payments to the Pensions Protection Fund should be reduced because of the pledge.

It is in talks with the DTI over the nature and extent of the guarantee, which covers people who were members of the BT pension fund when the company was privatised in the Eighties.

At least 16 schemes are understood to be protected by government guarantees.

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BTY, BTA, RMS,

Source: Daily Mail

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