(Bloomberg) -- BT Group Plc’s pension fund said it may need to tap the telecommunications company for more support if its returns fall too low. 

BT Pension Scheme Management, or BTPSM, said it had become more cautious in how it manages liquidity for its almost 270,000 member scheme, according to a letter to the Work and Pensions Committee of UK MPs. The fund said it needed to have buffers to withstand market turbulence, but there is only so much liquid collateral it can hold without it being a drag on returns. The Financial Times reported on the letter earlier. 

The BT pension is one of the largest defined benefit plans in the UK and it used liability-driven investment strategies to help it manage its risks. The pension, which pays out about £2.5 billion ($3 billion) in benefits each year and has about £47 billion of assets, was responding via a written submission to MPs investigating the selloff in gilt markets in late September. 

“We have become more cautious in how we manage the scheme’s liquidity and have increased the collateral buffer to which we operate,” BTPSM wrote in the letter. “This will position the scheme to better weather any further volatility in the gilt market but will also reduce the expected returns from our assets.”

“The scheme does need to achieve a certain level of investment return to achieve its 2034 funding targets and if expected returns fall below this level then the scheme may need more support from BT in future valuations than previously anticipated,” the fund added.

Last month, regulators told UK pension funds to hold onto newly increased cash buffers to protect against any future turmoil in bonds markets. Officials in Ireland and Luxembourg, countries where the bulk of sterling liability-driven investment products are domiciled, said they didn’t consider it appropriate for these kinds of funds to reduce resilience at this point. 

“We remain on track with our plan to eradicate the BT Pension Scheme funding deficit by 2030, despite the recent volatility in the gilt markets and subsequent impact on the LDI market,” a spokesman for BT said by email. BTPSM declined to comment beyond the letter.

BT shares fell as much as 2.4% in early London trading.

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