Fri 23 July, 2004 17:16
By Tom Burroughes
LONDON (Reuters) - Subsidiaries of manufacturing firm Turner & Newall (T&N) will immediately stop paying into the pension fund of 2,500 staff as its U.S. parent firm works to emerge from bankruptcy, the trustee of the fund says.
The employees at 13 T&N subsidiary firms will receive no further company contributions to their schemes, while about 37,500 other fund members face possible losses, a spokesman at Alexander Forbes Trustee Services told Reuters on Friday.
"Other workers (37,500) will be affected in the longer term but that is still being calculated," he said.
He declined to elaborate on the possible scale of future losses to the pension scheme
The British government, which earlier this year unveiled an emergency 400 million-pound package for members of bankrupt retirement plans, said it had limited powers to act in the T&N case because the fund had not been wound up.
"The things we can do in terms of any involvement are very limited at this stage," a spokesman for the Department for Work and Pensions said.
State pensions regulator OPRA, which earlier this month raised concerns over the T&N pension fund, said it had limited powers to compel a foreign firm like Federal-Mogul to honour its pension obligations.
"We don't have powers over foreign companies...it is a very difficult and complicated issue," a spokeswoman for OPRA said.
The government's plans to protect pensions with state aid and a safety net fund next year could be overwhelmed if a pension scheme the size of T&N's scheme found itself in difficulties, said Nigel Waterson, parliamentary pensions spokesman for the opposition Conservative Party.
"I think the government should be urgently reviewing the adequacy of its (400 million pound) rescue package