UK – The 9.2 billion-pound (13.6 billion-euro) British Coal Staff Superannuation Scheme has transferred 259 million pounds from its investment reserve to cover a deficit in its 6.89 billion-pound Guaranteed Fund.

The move follows the results of the 2003 actuarial valuation which found the Guaranteed Fund had liabilities of 7.15 billion pounds and a funding level of 96% - a deficit of 259 million pounds.

The transfer will see its investment reserve fall from 1.06 billion pounds to 805 million pounds.

“In accordance with the guarantee provisions, 259 million pounds has been transferred from the Investment Reserve to the Guaranteed Fund to cover the shortfall,” the scheme said in a newsletter for members.

“Despite a valuation that shows a deficit in each of the three main sub-funds, your total pension will continue to increase each year until at least January 2008,” it said.

The valuation found that the Bonus Augmentation fund had an 87% funding level and a deficit of 171 million pounds. The Guarantor’s Fund was 72% funded with a 264 million-pound deficit.

“Benefits in the Guaranteed Fund, including annual RPI retail price_index increases, are absolutely guaranteed by the government regardless of the size of any deficit,” the scheme added.

The scheme said that, following the transfer and other adjustments, the Guaranteed Fund and the Guarantor’s Fund would both be 100% funded. The Bonus fund would be 112% funded.

In October last year the scheme revamped its investment structure and named new managers, with the aim of using its risk budget to best effect.