The growing prospect of the biggest winding up of a pension scheme to date has left 40,000 UK workers and ex-workers of Federal Mogul and its subsidiary T&N fearful for their retirements.
Accountancy Age, 23 Jul 2004
The Financial Times reported that if the fund - which has a shortfall of nearly £875m - is closed, the consequences would be dire.
Workers at Federal Mogul could lose almost half their retirement income and those at T&N would see benefits frozen, the paper said.
Meanwhile Alexander Forbes, the independent trustee to the scheme, said a high court action by Kroll had increased the chances that the fund would have to be wound up.
Kroll, which is acting as administrator to the British arm of Federal Mogul, said it had 'sought the guidance' of the High Court and been instructed to withdraw the subsidiary companies from the T&N Pension Scheme.
'Administrators have a legal duty to seek to balance the rights of pension scheme members with those of other creditors,' Kroll said in a statement.
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