Massey Ferguson in pension appeal
UK – The US owner of tractor firm Massey Ferguson is to appeal against a UK court ruling that full pensions must be paid to staff who have been fired or retired early.
The case relates to US-based farm machinery group Agco and the UK pension fund of tractor-maker Massey Ferguson, which it bought in 1994. At stake is up to 60 million dollars in extra plan liabilities, the company says.
Agco says that it applied to the High Court in London last year for “clarification” about a rule of the pension fund about whether full pensions are payable when an employee retires or is fired.
“On December 20 2002, the Court ruled that full pensions are payable, in certain circumstances, in the context of early retirements or terminations,” Agco said.
“Under the ruling, the previously announced closure of the Coventry facility would entitle certain terminated employees to receive a full pension,” it added.
Now the firm says it will appeal against that decision. “We confirm that we are in an appeal, and we expect the appeal to be heard in May,” said Agco vice president Molly Dye.
Duluth, Georgia-based Agco says “full pensions should not be payable”. Agco says that if its appeal fails, “the estimated impact for the pension plan would be an increase in plan liabilities of between 50 million dollars and 60 million dollars”.
It says that would require additional funding to the pension plan of around 10 million dollars a year for the next three years.