AN industrial mask maker employing hundreds of North-East workers is embroiled in a pensions dispute, The Northern Echo can reveal.

3M, which runs a plant in Newton Aycliffe, County Durham, has been accused of “dashing pensioners’ expectations” by halting discretionary inflation-linked increases.

The company last night (Tuesday, October 24) played down the row, saying its fully-funded scheme is “in a state of good health.”

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However, the 3M Pensions Action Group claims the situation is very different, adding the company has no excuse since its parent firm, the US-based 3M Corporation, recorded a latest post-tax profit of $5.5bn.

The row comes just weeks after the Echo revealed 3M had placed a protective coatings factory in Northallerton, North Yorkshire, under review, putting scores of jobs at risk, after it fell “significantly short of expectations.”

Mike Smith, 3M Pensions Action Group chairman, said ex-workers have been left shocked by the firm’s attitude, adding many feel like their trust has been broken.

He also confirmed the organisation was speaking to the Government over potential changes to legislation.

He said: “The 1995 Pensions Act obliged private sector defined benefit pension schemes to pay annual inflation-linked increases to pensioners on all pensions accrued after April 1997.

“3M UK had regularly paid such increases at its discretion and members were never given any reason to doubt that practice would continue.

“However, since 2008, despite not communicating any intent to stop such payments altogether, the company has failed to make any discretionary increases.

“Since it stopped paying annual discretionary increases, inflation has reduced the purchasing power of pensions by over 20 per cent.

“Expectations of pensioners have been dashed and many now face real financial hardship and uncertainty.”

However, 3M, which makes millions of industrial face masks at its Aycliffe plant to stop workers inhaling dangerous dust and vapours, last night rejected the claims.

A spokesman said its pension scheme was working well, confirming bosses will assess potential increases as the financial climate evolves.

He added: “Over the years, 3M has focused on satisfying all of its commitments to employees and other stakeholders.

“Part of that includes taking steps intended to ensure the pension fund is in a state of good health for the benefit of its members, including both current and former employees.

“Following significant contributions by 3M over recent years, we are pleased to say the UK pension scheme is currently considered fully funded and all of the participants are expected to receive the benefits that 3M committed to provide.

“When contemplating discretionary increases, we consider many current and future business and economic factors – and we plan to continue with that approach.”

Speaking to the Echo back in June, the company confirmed its Northallerton base, known for making coatings for steel pipes in the oil, gas, rail and water industries, could close by the middle of next year.

It said up to 55 staff and three contractors would be affected in any changes, adding a closure would see some product lines stop and others be transferred to plants in the business based across Europe.