UK- British Telecom has refuted estimates that the shortfall in its £27bn (e42bn) pension fund may be as high as a third of its market capitalisation.

BT, which has one of the largest defined benefit pension schemes in the UK, insists the figures are much lower than the £5.8bn (e9.1bn) quoted in recent research by Goldman Sachs.

In March BT, which has over 70% of its scheme assets invested in equities, had a funding deficit of around £1.8bn (e2.8bn). The report estimates that the slump since March has pushed BT’s deficit up a further £4bn (e6.3bn).

Goldman Sachs does not hold equity market losses solely responsible for BT’s current situation. In December 1999 a formal valuation put BT’s shortfall at £1bn (e1.6bn) prompting the company to inject an extra £200m (e313m) a year in contributions.

BT remains insistent that figures from Goldman Sachs are flawed, and says its deficit is unchanged since last December when it was around £1.6bn (e2.5bn). A spokesman at BT stated: “it is necessary to take a long term view [when looking at the deficit_figures]. Obviously these pensions will not be claimed immediately”.

He added that the funds’ actuaries were confident an annual injection of £200m would be sufficient.

The research from Goldman Sachs follows a recent study by UBS Warburg which names BT as having the largest, estimated deficit among the FTSE 100 companies at around £6bn (e9.4bn).

JP Morgan Securities was more generous in its estimates. In July, a research report was released calculating the deficit to be in the region of £4.2bn (e6.6bn).