Documents signed to secure ‘sustainable’ pensions for steelworkers
Tata gave details of a new scheme to replace the British Steel Pension Scheme.
The final move to secure the pensions of tens of thousands of steelworkers has been announced, ending any fresh doubts about future payments.
Steel giant Tata gave details of a new scheme to replace the British Steel Pension Scheme (BSPS).
Workers voted earlier this year to accept lower benefits in return for investment which will secure jobs.
Finalising the pension arrangements is expected to clear the way for Tata to merge its European steel business with German firm Thyssen Krupp.
Tata Steel UK said it had signed the documentation for a so-called regulated apportionment arrangement (RAA) with the Trustee of the British Steel Pension Scheme, offering “more sustainable outcomes” for pensioners, employees and the business.
When the RAA takes effect the British Steel Pension Scheme will be separated from Tata Steel UK and a number of affiliated companies.
The steel trade unions Community, Unite and GMB, said in a statement: “We welcome the RAA announcement which includes a commitment that Tata will stand behind a new scheme with reduced annual increases.
NEWS: Trade union response to steel pension changes https://t.co/WTJAjZaxRx— Community union (@CommunityUnion) August 11, 2017
“For over a year our members have feared for their security in retirement, and this announcement helps to bring that uncertainty to an end.”
When the RAA takes effect, workers will be able to join a new BSPS, which will have lower future annual increases for pensioners and deferred members, which will give it an improved funding position which would pose “significantly less risk” for Tata, said the company.
Koushik Chatterjee, Tata Steel’s Group Executive Director, said: “The RAA process has been a long and detailed one, and I would like to thank the Pensions Regulator, Pension Protection Fund, the Trustee of the British Steel Pension Scheme, its members, the unions and employees – indeed, all our stakeholders, including the Governments of the UK and Wales, for their constructive engagement through the process.
“Considering the continued challenges in the global steel industry as well as the uncertain global politico-economic environment, the RAA presents the best possible structural outcome for the members of the British Steel Pension Scheme and for the Tata Steel UK business.
“The RAA is one important milestone in Tata Steel UK’s journey towards a sustainable and enduring future, with pension obligations, whose risk profile would be consistent with the underlying business.
“The net financial impact of the RAA including the payment of the agreed amount would be reflected in the Q2 FY18 financials for the company.”
The union statement added: “We fought to ensure that our members can choose whether they want to transfer to a new modified scheme, underpinned by Tata, or to remain in the BSPS and therefore receive Pension Protection Fund (PPF) compensation.
“Now that this choice is being delivered, the company and the trustees must step up to provide the necessary information and guidance to enable every member to make an informed decision in their best interests.
“Our members have been extremely disappointed at the unacceptable lack of communication in recent months, and this has to change immediately. The company and the trustees must remember they are dealing with people’s long-term future, their life savings, and their family’s financial security; it is vital members are given all the support that they need.”