A very old fashioned company
Turner and Newall was a very conspicuous success and a hugely costly failure
It was a manufacturing business based in Manchester, United Kingdom. At its peak, it was a constituent of the FT 30 index of leading companies on the London Stock Exchange. As part of their business, the company was one of the first to industrialise asbestos, and its eventual demise in 2001 left an aftermath of asbestos litigation.[1]
It had a very old fashioned pension scheme which even in 2001 was solvent when nothing else about T&N was. But it was solvent on the basis that it didn’t have to pay increases to the pensions of the vast majority of its members when they moved into retirement.
If it did, it would be insolvent and – there being no sponsor after T&N’s demise, it could have gone into the PPF. Why isn’t it in the PPF today?
We discussed this question at our meeting of PAGA (see my article on the PAGA rabble).
We are now beginning to see the Pension Schemes Act changing things for the better. One area where we did not expect to see progress was in paying going forward pension increases for those denied them for three decades.
Pensions Age have an exclusive which I publish as I know that many subscribers to this blog are directly or indirectly affected by the scandalous treatment of those who have not been protected by law and have lost out.
Here is the Pensions Age article which you can read in its original on this link.
Exclusive: Pre-97 indexation reform set to push T&N Pension Scheme into PPF
By Natalie Tuck
The Turner & Newall (T&N) Retirement Benefits Scheme (1989) is expected to enter the Pension Protection Fund (PPF) after spending 20 years in assessment, due to upcoming changes to the lifeboat fund’s indexation rules.
The move follows the introduction of the Pension Schemes Act in April, which will allow the PPF and the Financial Assistance Scheme (FAS) to pay annual inflation increases of up to 2.5 per cent on benefits accrued before 1997, where members had a right to such increases under their original scheme rules.
Due to begin taking effect from January 2027, the reform increases the value of compensation payable by the PPF.
As a result, Vidett, the scheme’s sole trustee, expects it to transfer into the PPF because its assets are insufficient to fund the additional increases.
Based on the last audited accounts, as of 31 March 2025, the scheme had 11,836 pensioners and 3,846 deferred members. Its net assets stood at approximately £818m, although its liabilities were not disclosed.
The scheme has been in PPF assessment since July 2006, following a company voluntary arrangement in 2005. T&N’s US parent company, Federal-Mogul, filed for bankruptcy in 2001 as a result of asbestos-related liabilities arising from former T&N employees.
However, the scheme was found to have sufficient assets to secure benefits above PPF compensation levels, leading to a £1.1bn bulk annuity buy-in with Legal & General (L&G) in 2011, which at the time was the largest deal of its kind.
The scheme’s assessment period has been prolonged by a series of legal challenges relating to members’ entitlement to compensation above the former PPF cap of £25,600 at age 65.
Vidett client director, Stewart Graham, commented: “Following the scheme’s Section 143 valuation in 2011, we were able to secure benefits broadly in line with PPF compensation levels with L&G later that year. However, legal challenges to the PPF valuation framework – heard in both UK and European courts – significantly extended the scheme’s assessment period.
“These cases ultimately led to important regulatory changes, including the introduction of a minimum 50 per cent PPF compensation level in 2018 and the removal of the compensation cap in 2021.”
Graham explained that since then, the trustee has worked closely with the PPF, with support from L&G in its role as insurer and administrator, to reassess the scheme’s position against these updated requirements.
“In addition, changes arising from the 2025 Budget – introducing inflation increases on pre-1997 benefits – are expected to result in the scheme transferring into the PPF, as assets are now unlikely to fully support these enhancements and produce the best outcome for members,” he confirmed.
Since the 2011 buy-in, L&G has administered the scheme’s pension payments. However, as part of preparations for the expected transfer, specialist PPF administrator Broadstone will assume responsibility for pension payroll and member administration from L&G on 1 July 2026.
An L&G spokesperson said: “As part of the planned handover, and at the trustee’s request, L&G’s role as administrator will cease and transfer to a new provider, who will continue to pay pensions in payment as normal.
“L&G has supported the scheme in line with its agreed role and will continue to work closely with the trustee and the new administrator to help ensure a smooth transition.”
In addition, a PPF spokesperson said its focus is on continuing to work with the trustee and other parties to “ensure a smooth transfer of the scheme and its members to the PPF”.
“Many of the scheme’s members may now receive more than originally expected in PPF compensation due to recent legislative changes which enable the PPF to pay increases on pre-97 benefits going forward,” the spokesperson confirmed.
Currently, 35 schemes have exited PPF assessment and are yet to wind up; the fund’s expectation is that a “relatively small” number of these schemes could transfer to the fund once funding is tested on the basis that includes pre-97 indexation.
“This position is not final and may change depending on the detail of the final legislation and when it comes into force,” they stated.
The spokesperson added that the PPF is also in dialogue with schemes that have previously exited its assessment process as overfunded but have yet to be wound up.
“This is to determine whether they have members who may be eligible for pre-97 indexation and, if so, whether any schemes may need to re-enter PPF assessment to secure the best possible overall outcome for members,” they added.
The question that will be being asked by pensioners who have no increases is “what restitution do I have if the scheme’s employer is still solvent. I hope there will be some comment on this.
There is a large group of Members who still loose out and are left with non-indexed pensions. I better declare I am one.
Those are the members of pension schemes which entered PPF assessment but were deemed to have sufficient assets at the assessment date to buy out the benefits on the then PPF non escalating benefit level but would have failed that test had escalating benefits been projected.
Unless the scheme ran on as a closed scheme under PPF rules, those members were bought out with an insurance company with non escalating benefits marginally above PPF level, but not sufficiently above to compensate for the loss of an escalating pension (whether Deed defined or created by a Constructive Obligation utilising discretionary powers).
These pensioners have lost out significantly over the past 20 years.
The gainers being the insurance companies who have been given free range to take a significant proportion of the Pension Scheme’s assets to profits by having an unregulated pricing structure embedded in legislation.