Union more hopeful of T&N deal on pensions

The trade union representing the workers of Turner & Newall emerged from a meeting with the company's US parent yesterday more optimistic that a settlement to safeguard pension rights could be reached.

The trade union representing the workers of Turner & Newall emerged from a meeting with the company's US parent yesterday more optimistic that a settlement to safeguard pension rights could be reached.

The pensions of up to 40,000 workers and former employees of T&N were thrown into crisis after Federal Mogul, the owner of T&N, filed for bankruptcy protection in the US. Its administrators, Kroll, froze the assets of the pension scheme last week while it sought to recover money for other creditors.

Amicus, concerned that Kroll could force the trustees to close down the scheme, leaving workers with vastly reduced pensions, was told by Federal Mogul that the pension fund has an ongoing deficit of £300m. If it were to be wound up, it would have to find about £875m to give an immediate guarantee for all pension liabilities.

It emerged from yesterday's meeting that Federal Mogul has offered to make a one-off payment of £65m to the pension fund, on top of its current £7m contribution. But the independent pension trustee has rejected this offer, asking instead for £29m a year for the next eight years, on top of the current contribution rate of 11.4 per cent of payroll.

Amicus is calling for a crunch meeting with the independent trustee, Kroll, and senior representatives from Federal Mogul. Dick Croft, a regional officer for Amicus, said: "Failure to reach an agreement could result in closure and, potentially, the company winding up, which could jeopardise thousands of jobs as well as people's pensions."