UK – The pension scheme of utility firm Bristol Water is shifting to fixed income from equities in a bid to redress a 9.8 million-pound deficit following equity market declines.

“The investment strategy has been carefully examined and it has been concluded that the appropriate long-term strategy is to reduce the proportion of equities with a corresponding increase in investments in bonds and other fixed income securities,” the firm said.

“The timing of implementation of this change remains under consideration. This policy has been agreed with the trustees.” Company spokesman Paul Kelson referred questions on the move to finance director Andy Nield, who did not respond.

The firm said: “We will review in due course the level of contributions to the scheme in the light of actuarial advice and movements in the equity and gilt markets.”

Most of the company’s pension arrangements are provided through its membership of the Water Companies' Pension Scheme final salary scheme, through a separate section.

Its most recent triennial actuarial valuation in April 2002 assumed investment returns of 7.2% a year on the 97 million pounds of applicable assets. It found that the actuarial value of these assets represented 107% of accrued benefits.

But an interim valuation as at April 1 2003 found that assets covered 97% of accrued benefits.

Elsewhere in the UK, technology firm AEA said it was “entering into a programme of discussions with employees and their representatives with a view to making a significant reduction” to the pension deficit in future years. Spokespersons at the company did not respond to queries on the matter.