The BT Group PLC pension fund, one of the largest in the UK, shrank by over a fifth, or £11bn, in the market turmoil that followed the government’s 'mini' Budget.
The FTSE 100 telecoms group’s defined benefit pension scheme, which employed liability-driven investment (LDI) strategies to protect against unfavourable movements in interest rates and inflation, said the value of its assets plunged between September 23 and 28.
In the year to 30 June, the net assets of the BT Pension Scheme (BTPS) fell from £57bn to £47bn, before the fiscal statement by then-Chancellor Kwasi Kwarteng sparked an even bigger fall in a matter of days.
BTPS said BT Group was not forced to provide any cash to cover the fall in value of the scheme’s assets, in contrast to fellow former monopoly Royal Mail's parent IDS.
BTPS has almost 270,000 members
“Whilst the value of the scheme’s assets has fallen over this period, there has been no worsening in our estimated funding position,” said BTPS’s chief executive Morten Nilsson, in a statement accompanying the annual report on Tuesday.
On LDIs, Nilsson said "almost all" UK DB schemes hedge their interest rate and inflation risk using a combination of these gilts and interest rate and inflation swaps.
“During this time, our hedges have performed as expected, and whilst the value of the scheme’s assets has fallen over this period, there has been no worsening of our estimated funding position.”