UK – The £34bn (€49.9bn) BT pension fund deficit has been ‘slashed’ by roughly £2bn since last year, while the Royal Mail pension scheme is a further £1bn in deficit, according to weekend newspaper reports.

They claimed that telecoms giant BT will unveil a pension deficit of just over £1bn when it releases its full-year financial results on Thursday.

However, a BT spokesperson told IPE: “The weekend press has done a whole load of speculating on all sorts of results that may come out on Thursday, but we can’t confirm or deny them.”

According to BT, the IAS19 pension deficit as at 31 March 2005 was £3.3bn post tax. However, by 31 March 2006, the deficit had dropped to £1.8bn.

“That’s primarily because of rising bond yields and the stock market performance,” said the spokesperson.

He declined to comment on whether a new investment strategy for the pension fund would also be unveiled on Thursday. This comes on the back of a recent Financial Times interview with new Hermes chief executive Mark Anson – a “fan” of diversification strategies, according to some market sources.

“There may well be some sort of strategic shift. It would be a matter for the trustees and Hermes,” the spokesperson told IPE.

A spokesperson for Hermes – the £64bn pensions management arm of the BTPS - said that no conclusion has been reached on this matter yet. However, she declined to confirm whether a new strategy could be on the cards in Thursday’s financial results.

Outgoing Hermes chief investment officer Nick Mustoe – who is due to become CIO head of equities at Pictet Asset Management in July - could not be reached for comment.

According to reports, BT will not announce its contributions to the pension fund until negotiations with the government concerning the crown guarantee have been completed.

According to BT, the scheme is sticking to its guns that the government is liable to underwrite three-quarters of the pension fund liabilities if BT goes bust. This follows on from a guarantee drawn up during the group’s privatisation in 1984.

“We are talking with the DTI [Department for Trade and_Industry]. We think they are in broad agreement with us. But it’s tough to say – that is not something that is in our hands.”

BT could not confirm when discussions with government would be concluded.

“It’s very difficult to say. Over the coming months is as about as good as it can get,” said the spokesperson.

Meanwhile, the roughly £17bn Royal Mail pension fund is expected to reveal this week that its deficit has risen from £4.4bn to £5.5bn.

This is thought to put added pressure on government to pump as much as £2bn into the scheme via a rights issue, said one article.

Royal Mail chairman Allan Leighton and new trade and industry secretary Alistair Darling are reportedly due to meet this week on the matter.

According to a Royal Mail spokesperson, there is just speculation that the scheme will make this announcement when it releases its year-end results.

"We haven't confirmed when we are going to make that announcement. There are no hard figures out there," he said

Earlier this month it emerged that the Royal Mail scheme appointed Law Debenture Pension Trust Corp. as a trustee. It was the first time a corporate trustee operation been appointed as a trustee, a newsletter for BT and Post Officer pensioners said.