UK - BT’s pension trustees will launch a court action this week to determine the extent of the company’s ‘crown guarantee’.

When BT was privatised in 1984, the government agreed that the Crown would assume responsiblity for a proportion of BT’s liabilities.

The reason behind the trustees’ case this week is to further clarify the extent of the Crown’s responsibility, including whether the guarentee should apply to BT workers employed after privatisation.

The outcome, expected some time in October, could see the government forced to subsidise BT’s £7.6bn pension deficit.

If BT, a former state-owned company, were to become insolvent, the crown guarantee would determine how the British government would act.

BT said the case was “purely technical” and that the company fully supported and welcomed it.

“It will help the trustee of the BT Pension Scheme seek clarity on the crown guarantee from the court,” the company said.

“BT is a defendant only as a technicality.”

It added that trustees had been seeking clarity on the issue for several years.

BT Pension Scheme’s most recent annual report saw it announce a £1.4bn drop in its deficit, down from £9bn.

Last year also saw the first of 17 funding payments by the telecommunications company to close the shortfall.

The pension scheme has been under growing pressure to solve its deficit, with the Pensions Regulator earlier this year expressing “substantial concerns” about its current funding proposals.