Kvaerner UK, the shipping and construction group, tried to play down fears over the security of its £1.5bn pension fund yesterday, claiming reports that the group's former parent had sold the company to escape the fund's looming deficit were untrue.
Leif Salomonsen, its president and chief executive, said that although Kvaerner UK had been sold for just £1, this is "totally irrelevant when it comes to the company's ability to meet its current obligations".
But he conceded that the company was carrying out a review of the pension fund, and the company's business strategy, to work out how it could be sure to meet its obligations. "It is likely to be at least towards the end of 2005 before we will be in a position to clearly advise on the way forward," he said.
He said the company would increase its contributions next year, and said that with assets of 15bn Norwegian kroner (£1.3bn) already in the fund, he did not believe the company would need to pay much more.
The Kvaerner UK fund has 30,000 members, and a deficit of £250m. Its Norwegian parent company, which runs under the same name, sold it to its management in March, just days before the UK's new pensions regulator opened its doors to business.
If companies sell subsidiaries, leaving a deficit in the fund, the regulator can demand the parent makes a one-off payment. But its ability to pursue negligent parent companies overseas has yet to be tested.Reuse content