Fears for T&N pension after talks

Dick Croft, from Amicus, is among union reps lobbing Federal Mogul

Unions representing Turner and Newall employees and pensioners say they are 'disappointed' by the outcome of talks with US parent company Federal Mogul.

This week, Amicus, T&G and GMB met in New York with the US firm's investors.

It is feared that up to 40,000 current and former workers of the car parts maker could lose part of their pension.

The pension fund was frozen by administrators of Federal Mogul, the US firm which owns T&N and has been in bankruptcy protection since 2001.

Unions said that the firm's shareholders had not improved on their offer of a top-up payment of $130m, now worth slightly more than the original amount at £71m.

The independent trustee had originally turned the original £65m offer down.

It said minimum annual contributions of £29m were needed on top of the employers' existing contribution rate of 11.4% for the next eight years.

Bleak outlook

The UK pension scheme currently faces an £300m shortfall, rising to an estimated £875m if the scheme was wound up.

Alexander Forbes - the independent trustee for the pension scheme - is now considering if the offer made by the major US Federal Mogul shareholders is workable, the unions said.

Further meetings between unions and other parties are expected to take place over the coming weeks and the unions urged members not to take "precipitative action" until the outcome of the discussions was known.

Up to 20,000 deferred pensioners could face losses of up to 70% of their pensions, and 20,000 existing pensioners will not get inflation-linked rises if the pension scheme is wound up.

A spokesman for Federal Mogul told BBC News Online it would issue a statement once it had something "more concrete" to say, but it would not be commenting at this point.