UK - Birmingham plastics firm Tufnol is holding talks with regulators and unions after using workers' pension contributions to pay off debts.
The company said “severe cashflow problems” had forced it to delay payments for 17 months.
Pensions advisory service OPAS said failure to pay employee contributions by due dates was illegal and the firm could be fined up to £50,000.
Employee contributions paid in the 12 months prior to a company going into liquidation can be recovered through the National Redundancy Fund.But if Tufnol folded, workers could lose the remaining five months’ contributions.
OPAS technical director Des Hamilton said Tufnol’s pension provider could also have a case to answer.
“If this company goes belly-up we may be knocking on the door of the insurance company involved,” Hamilton said.
Tufnol joint managing director Peter Jones said the company was paying its current contributions.
He added: “In regard to the outstanding contributions, we are in negotiation with union representatives and OPRA to find the best and speediest means to repay. We are waiting for a response from those groups.”
Jones said last year had been a particularly difficult trading period.
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