UK - The government has demanded US auto component manufacturer Federal Mogul makes the "maximum possible contribution" to pensions owed to 40,000 UK workers.
Around half the final salary scheme members at Turner & Newell – the UK arm of Federal Mogul – stand to lose 70% of their benefits and the rest expect to miss out on inflation-linked rises if the scheme is wound up.
Federal Mogul is currently under Chapter 11 bankruptcy protection and while it has vowed to make good any deficit in its American scheme, it has refused to do the same at T&N.
But pensions minister Baroness Hollis (pictured) said it was up to the group of Turner & Newell companies to “make the maximum possible contribution” to meet the pension promises of scheme members.
Representatives from trade unions Amicus, the Transport & General Workers’ Union and the GMB have met with Federal Mogul’s new owners – majority shareholder Carl Icahn and asbestos creditors – and an independent trustee in New York over the issue.
The unions want the firm to pay a lump sum of £65m into the scheme as well as annual contributions of £7m. This proposal has been rejected by its independent trustee.
Hollis said: “We expect the T&N companies to make the maximum possible contribution to meet the obligations to scheme members. Until these discussions are complete we are unable to draw any conclusions about the future of these schemes.”
The T&N scheme is 98% funded under the minimum funding requirement and would be able to “run on” if the company continued to make annual contributions and a one-off lump sum.
However, a spokesman for the firm said that Icahn and the asbestos creditors did not want to fund the estimated £300m scheme shortfall. He said: “The reality, albeit harsh for all concerned, is that the new owners of Federal Mogul do not want to assume any contingent liabilities – whether they are from asbestos, debt or pensions.”
Hyperbolic discounting and political temptation: Why Brexit-fuelled AE reversal would be a 'monumental' mistake
The home secretary has suggested AE should be scrapped in the event of a no-deal Brexit. Darren Philp explains why this would be misguided
The trustees of the Kodak Pension Plan No.2 (KPP2) have said it will likely enter the Pension Protection Fund (PPF) in "due course" after reviewing the scheme's investment in Kodak Alaris.
A US company has completed a £285m pensioner bulk annuity for around 1,100 of UK members with Legal & General (L&G).
Former BHS chief Dominic Chappell has been accused of trying to rewrite history as he seeks to overturn a conviction for failing to hand over information to the regulator.