UK – The in-house pension fund of Hermes Pensions Management, the asset manager owned by the BT Pension Fund, saw its deficit widen in 2004, company documents show.

The company’s 2004 annual report disclosed that the £39.9m (€57.4m) Hermes Group Pension Scheme had liabilities of £54.6m at the end of the year – meaning a scheme deficit of £14.7m. This compares to a deficit of £14.3m a year before.

The scheme was last valued as at the end of December 2003, which showed that its actuarial value was sufficient to cover 96% of the benefits that had accrued to members.

The £2.5m in company contributions that year - 18.5% of pensionable payroll – was “sufficient to eliminate the actuarial deficit in the five years of the schedule of contributions”.

The next formal valuation of the scheme is due as at December 31 2006.

Hermes paid out a total of £210,000 on behalf of the BT scheme as fees to trustees to that scheme. Hermes is the main investment manager of the BTPS.

The report revealed that Hermes’ turnover fell to £57.6m from £58.6m in 2003. Pre-tax profit before interest and taxation was £3.7m, from a loss of £4.8m a year before.

Chief executive Tony Watson saw his total pay package rise to £1.3m from £1.16m.

Meanwhile, Hermes has “strongly refuted” Korea’s financial regulator over alleged irregular dealings in Samsung Corp. shares.

The regulator has referred one of Hermes’ former fund managers and the company itself to the prosecuting authorities.

“Hermes will vigorously defend itself against any allegations,” it said in a statement. It said has no evidence of price manipulation.

“Such an action would directly conflict with Hermes’ long-standing business principles.”