Pension fund fears at Shorts

About 1,000 jobs have been lost at Shorts in the past year

Northern Ireland's biggest company Shorts has a potential shortfall in its pension fund of more than £160m, figures have shown.

The possible deficit at the Belfast aerospace company has been highlighted by controversial new regulations governing the valuation of pension funds.

In a statement on Friday, Shorts said it would not have any impact on its workers or pensioners.

The company has just published its financial results which reveal that the pension fund is worth £260m.

However, the most sustained stock market plunge in 15 years, which wiped billions off the value of shares and pension funds, has meant that under current rules there is a shortfall of £33m.

As a result, Shorts has started to pay up to eliminate that deficit.

Projected

However, this figure is calculated before evaluations are done under the proposed new rules on how pension funds are valued.

Under that calculation, the shortfall amounts to £160m - or 38% of the total value of the projected payout.

The new methods of calculating the value of pension funds are controversial and as a result their implementation has been delayed - it is possible they may never be fully introduced.

Many British companies have reported shortfalls in their pension funds under the proposed rules.

It has affected their values and prompted some to close schemes that promised workers a proportion of their final salary.

In a statement on Friday, Shorts said: "Employees, both past and present, have no need to be concerned.

"The company is committed to retaining its final salary scheme."

BBC Northern Ireland business editor James Kerr said: "Its shortfall is worse than many other companies - if it's to fulfil that commitment, it could prove expensive."

On Thursday, it emerged that profits and sales at Belfast aerospace company Shorts fell last year, according to the latest figures.

Corporate

The company blamed the fall on the aftermath of 11 September and the slowdown in the world economy.

While profits at Northern Ireland's biggest company dipped only slightly at £55m in the year to January, sales were down by 10% at £450m.

During the last year, Shorts has cut its workforce by about 1,000.

In July, Bombardier announced it was building part of its new corporate jet at Shorts.

The round of job cuts at Shorts was one of the biggest single losses of jobs in Northern Ireland in decades.

The company had a workforce of 6,500 before the latest posts were axed.