T&N pensioners face further cut in benefits

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The Independent Online

Thousands of workers at Turner & Newell, the car parts supplier owned by the American firm Federal Mogul, are set to lose yet more of their pension savings, after the firm moved to wind up the company's pension scheme yesterday.

Thousands of workers at Turner & Newell, the car parts supplier owned by the American firm Federal Mogul, are set to lose yet more of their pension savings, after the firm moved to wind up the company's pension scheme yesterday.

Administrators acting for Federal Mogul, which has been under Chapter 11 bankruptcy protection for two years after it collapsed under the weight of a raft of asbestosis claims, applied to the High Court to wind up the scheme yesterday.

T&N's final-salary pension scheme already has a deficit of some £250m, with workers already having been forced to accept a cut in their proposed benefit from two-thirds of their final salary to a half.

The winding up of the scheme, which will leave the company to raid the fund's assets, is likely to wipe out most of the pensions of its 2,000-plus British workforce, many of whom are still waiting for compensation over their exposure to asbestos at work.

The Government's new pension protection fund should provide compensation for at least some of workers' lost pensions. But it is likely that compensation will have to be found by the Government, with the new industry-funded scheme not yet in place.

Concerns over the pension fund surfaced several weeks ago, as the company admitted that it was reconsidering the options for the pension scheme. It encouraged employees to continue contributing.

John Rowse, the national secretary of the Transport & General Workers Union, said: "Once again UK workers are losing out because of our antiquated and unfair laws on insolvency." Tony Murphy, Amicus's national secretary for the automotive industry, said: "Here we have a loyal UK workforce that have stayed with the company through difficult and uncertain times and this is how they have been rewarded."

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