Unite will start a legal challenge against Ford this week over alleged mis-selling of pensions to former employees who transferred to the collapsed Visteon Pension Scheme.
Unite national officer Roger Maddison believes the car giant “has blood on its hands” after some long serving staff members lost up to 60% of their pension when Visteon – a spin off from Ford – collapsed in 2000.
The legal action could affect up to 3,000 people who, the union claims, received negligent advice when Visteon took over Ford’s component plants.
The union claims that, although pension advice was given by Visteon, it was cleared by Ford’s pensions department. Documents handed to employees included guarantees of safeguards in the event of Visteon UK going bust, however, the company collapsed in 2009 when the scheme had a deficit of £350m.
Maddison told PP: “The case against Visteon UK would have been extremely strong, but Ford was complicit. We have been advised by our barristers that we have a good case, and would not take on something this expensive if we did not think we could win.”
However, he warned the legal action would be a lengthy, difficult fight.
Ford corporate affairs manager Brian Bennett said Visteon set up its own pension fund which was fully funded at the time of the spin off. And assets were transferred to the Visteon scheme in accordance with an independent actuarial assessment.
He added: “All transferring employees did so under the 2000 agreement drawn-up and agreed with the unions.”
He insisted all transferring employees were kept informed of their options and told to take independent financial advice.
Bennett said the situation was “regrettable” but insisted that Ford’s obligations to its former employees were fully discharged.
South Basildon and East Thurrock MP Stephen Metcalfe, whose constituents have been affected, has promised to raise the issue with work and pensions secretary Iain Duncan Smith and push for a select committee investigation.
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.