Hermes Investment Management, the in-house fund managers running the giant BT Pension Scheme, has undergone a significant restructuring this week.
It is understood that on 23 October, the fund management group, led by Saker Nusseibeh, informed some staff that there would be a restructuring in which some roles could be made redundant at Hermes.
The move comes a few weeks after the asset manager announced it had rebranded as Hermes Investment Management.
Hermes was established as Hermes Fund Managers in 1983 and is owned by the BT Pension Scheme, the UK’s largest corporate pension scheme.
However, according to BT Group’s latest report and accounts, the scheme has a sizeable deficit, and its pension scheme repayment plan has cost the Group significantly over the past three years.
Its 2014 report and accounts claim that before specific items, the group made a profit of £2.2bn. However, after specific items revealed in notes 8 and 19 as including restructuring charges and pension liability repayments, the group made a loss of £196m.
In May 2012, after the pension funding deficit was revealed to be £3.9bn in June 2011, the Group set up a special repayment plan.
At the 2014 valuation, after injections of £2bn in March 2012, £325m in March 2013 and £325m in March 2104, and including interest earned, the deficit is estimated to be £1.7bn.
Note 8 showed the 2014 interest expense on retirement benefit obligations was £235m.
Background
Last week, the European Court of Justice ordered BT Plc and the BT Pension Scheme Trustees to pay costs towards the Pension Protection Fund.
The BTPS had been given a Crown Guarantee, allowing BT a backstop to meet funding obligations to all members of its pension. However, judges at the ECJ said this protection did not mean that BT Plc and BTPS were exempt from paying the expected levy to the PPF.
Right to reply
When asked, a spokesman for Hermes Investment Management said there would be “no comment at this time”.
