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UK roundup: Ofcom, BT, Havering

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  • UK roundup: Ofcom, BT, Havering

UK - BT has suffered a blow in its bid to offset its £7.6bn pensions deficit by increasing the wholesale rates it charges competitors.

Currently, Ofcom sets the prices that Openreach, BT's wholesale division, is able to charge rivals such as Cable & Wireless and British Sky Broadcasting to deliver services to consumers.

The watchdog said it had received no "compelling evidence" from stakeholders that would justify any change in Openreach's charging structure.

Rivals have objected vociferously to the notion of having to pay for the servicing of BT's pensions deficit, and the regulator took a dim view of proposed adjustments respecting the cost of capital.

"There is, in principle, a potential connection between the existence of a defined benefits pension scheme, such as that operated by BT, and the estimated cost of capital," it said.

"At present, however, Ofcom considers there is insufficient evidence to support the need to make an adjustment."

The regulator will publish a final statement on its pensions review by the end of this year.

Meanwhile, the London Borough of Havering has appointed Hymans Robertson to undertake the trennial evaluation of its £340m Local Government Pension Scheme.

The consultancy already advises Havering on its investments practices, and the new contract runs for three years, with an additional two-year extension possible.

Up until the end of March, the funds assets were managed by Stanard Life, AllianceBernstein and Royal London Asset Management, which each managed roughly  30% of assets in UK equities, overseas equities and investment-grade bonds, respectively.

UBS held a real estate mandate for the remaining 10% of assets.

According to minutes from a meeting of the pension committee in late June, Hymans Robertson was to enter negotiations with State Street Global Advisers for a new global and UK equity mandate, with funds diverted from current active mandates to be managed passively.
 

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