UK – The deficit at one of the UK’s largest pension funds has continued to widen, as liabilities at the £41bn (€48.5bn) BT Pension Scheme (BTPS) rose twice as fast as assets.

Publishing its fourth quarter and full-year results late last week, telecoms company BT revealed the deficit in BTPS had risen to £5.7bn gross of tax at the end of March, and £5.9bn across all of the company’s schemes – more than doubling the £2.4bn shortfall reported the same month last year.

“The increase in the deficit during the year principally reflects an exceptionally low real discount rate of 0.87%,” the report noted.

“This includes the impact of quantitative easing on the debt markets and a higher inflation assumption.”

The fund’s real discount rate declined by almost a full percentage point in the 12 months to March, standing at 1.84% at the end of the previous financial year.

Expectations for RPI inflation also rose marginally, increasing by 25 basis points to 3.3%.

The company also said it sought to reduce the deficit through a scheduled £325m deficit-reduction payment, and noted that assets under management had risen by £3bn over the year, reaching a record £41.3bn.

The company once again expressed concern over changes to the IORP Directive, as proposed by the European Commission.

“Depending on its scope,” it said, “there is potential for any legislative change to have an impact on BT’s funding liabilities in the future.”

BTPS has struggled under its deficit over the past few years, with the company in 2012 paying a £2bn deficit-reduction payment to cut its deficit to £2.4bn, down from a peak of £9bn.