Hundreds of people faced heartache today as it was revealed their pension fund had a shortfall of millions of pounds.

An investigation has been launched into the shortfall which will hit retirement plans of hundreds of people who have paid into the Lister Pension Scheme.

More than 500 former employees of the former Bradford-based Lister Plc have received bombshell letters from the scheme's independent trustees - Hammond Suddards Pensions Trust.

The pension fund, which is being wound up, currently stands at £5.8 million, which is £2 million short of what it should be - and the trustees say that at the moment it could only meet 67 per cent of its liabilities.

Catherine McKenna, a trust director of Hammonds Suddards Pensions Trust, said a full investigation would be carried out with an independent adviser. "We will be making a claim against the company because this fund has been underfunded although we have not discovered anything untoward. In fact Listers put extra funds into the scheme when they discovered it was underfunded. They added £9,500 a week."

She stressed the police had not been called in. "It is not another Maxwell situation," she added. She said pensioners had been sent early information about the state of affairs and would be brought up to date when the investigation was complete and the claim had been completed providing extra funds.

The workers have won the support of Bradford West Labour MP Marsha Singh whose constituency includes Listers Mill. He said: "I support the pensioners involved and will raise the matter with the Minister responsible. I will be happy to meet the people in my constituency who are affected."

Former Listers worker Rita Davison, 58, of Northfield Avenue, Cottingley, says she needs the investment because her husband has been made redundant. Pensioner Fred Fox, of Templers Way, Fairweather Green. said he was told by the trustees he would receive only 62 per cent of his pension.

John Arrol, 55, of Claremont Avenue, Wrose, who paid into the fund for nine years until he was made redundant, said: "I feel very aggrieved and angry and so do my family. I want to know exactly what has happened."

Lister Plc's administrator Hunter Davies, of the Leeds office of accountants Ernst & Young, said one explanation was that share prices had fallen and, as a result, many pension schemes had suffered. He said: "Also employee and employer contributions have tailed off because the company no longer exists and the workers have lost their jobs so neither have been paying into the pension fund."

Hunter Kelly is still in the process of disposing of the firm's assets and has two other mill buildings - one in Huddersfield and the other in Barrow - to dispose of.

lHelp for the pensioners is available from the Pensions Advisory Service on 0171 233 8080; the Pensions Ombudsman on 0171 834 914; the Occupational Pensions Regulatory Authority on 01273 627600 or Hammond Suddards Pension Trust on 0113 284 70000 or write to People should write to: John Hooton or David Nimmo, Abbey National Benefits Consultants Ltd Deakins Business Park, Egerton, Bolton, BL7 9RP or Catherine McKenna or Rachel Clarke, directors, Hammond Suddards Pension Trust Ltd, 2 Park Lane, Leeds LS3 IES.

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