Pension crisis claims latest victim

THE pensions crisis could be poised to claim its largest victim. Engineering firm Turner & Newall, which has been blighted by asbestos-related compensation claims, had its pension fund frozen last night.

The High Court made the order to fend off the possibility that the fund, which has 40,000 members, might collapse. If it were to fold, it would be the largest such pension fund failure in the UK.

The pension scheme is effectively an unsecured creditor of T&N's parent company Federal Mogul, which is fighting to stave off bankruptcy in the US.

This means T&N - once one of the world's biggest producers of asbestos - would struggle to plug a potential deficit of £875m if its parent company went bust.

T&N's 2,500 workers, many of whose fathers worked for the company and succumbed to work-related asbestosis, have already seen their pension benefits cut, from two-thirds of final salary to half final salary. They will no longer be able to make contributions.

Those already retired would be entitled to money from the pension fund first, although they can expect payments to be frozen rather than index-linked, followed by 16,000 former employees of T&N. Current staff would then share what is left.

Another 20,000 retired employees of Federal Mogul in the UK are also drawing income from the scheme.

Dr Ros Altmann, a pensions expert and UK Government adviser, told Radio 4's Today programme that members who had not yet retired could get less than 40% of what they were expecting.

'Pensions are supposed to be deferred pay. This is money the workers were promised by the company at the end of their working lives and this is a situation where they might not get the money they were promised,' she said.

Financial Mail, This Is Money's sister publication, has been fighting for the pension rights of T&N workers. To help, the editor wants to hear from present and former T&N employees who have pension benefits tied up in the company scheme. Email editor@thisismoney.co.uk.