Turner & Newall pension scheme faces collapse

The US owners of car parts manufacturer Turner & Newall, which employs 4,000 people in 11 plants across the UK, have failed to improve their offer to pay £65 million into the company's pension fund.

The offer by creditors of Federal Mogul has already been turned down by the pension scheme's independent trustee. It said the American firm - which has been in Chapter 11 voluntary administration since 1998 - needed to contribute £29 million a year for the next eight years on top of its existing contribution rate of 11.4%.

The Turner & Newall pension scheme faces a £300 million shortfall. If it is wound up, 20,000 pensioners will not get inflation-linked rises - and up to 20,000 deferred pensioners will lose up to 70% of their pensions. Wind-up would cost £875 million, and could lead to the collapse of the entire company.

The Amicus, GMB and T&G unions, which represent Turner & Newall's employees and pensioners, will be meeting the scheme's independent trustee and administrator in mid-September to consider the situation.