Firms could pick up T&N tab

THE Pension Protection Fund could face a £500m bill the moment it opens for business next year.

The money will be needed to cover the deficit in Turner & Newall's retirement fund.

Other companies - which will pay an as yet unspecified levy into the PPF - will be forced to pick up the tab.

In a paper for RBC Capital Markets, leading independent pension expert John Ralfe warns that around 20,400 T&N pensioners could face losing 20% of their promised benefits. Another 16,800 scheme members could lose as much as 80% on a wind-up.

T&N's trustees announced this week that they would not vote in favour of a US restructuring plan that could pull the company and its American parent Federal-Mogul out of bankruptcy on both sides of the Atlantic.

The companies went into bankruptcy in 2001 to shield themselves against asbestos liability claims.

Parliamentary Ombudsman Ann Abraham said this week that she will investigate whether successive governments failed to warn millions about the risks of company pension schemes.