Tuesday, 16 May 2017

Tata Steel says nears UK pension scheme deal



Tata Steel says it is closing in on a restructuring of its UK pension scheme - a condition of a rescue deal agreed with staff last February.
 
The company said talks with regulators - subject to formal approval - were expected to result in Tata ploughing £550m into the deficit-laden final salary British Steel Pension Scheme (BSPS).


It said that under the terms, the BSPS would take a 33% stake in Tata Steel - ending Tata Steel's liabilities for the BSPS scheme which would transfer to the Pension Protection Fund (PPF) - an industry-backed pensions lifeboat.


Tata said it would sponsor a closed new pension scheme instead, which would have lower future annual increases for pensioners and deferred members than those within the BSPS.


It said the resulting improved funding position would pose the company "significantly less risk".


Tata's statement said: "There is presently no certainty with regards to the eventual existence, size, terms or form of the new scheme and the funding position and membership of any new scheme would be dependent on a voluntary membership transfer exercise."


Unions gave a cautious response in a joint statement.


The Community, Unite and GMB unions said that when workers voted to accept Tata's turnaround plan and commit to fresh investment, members did not vote to allow the firm to put the BSPS into the PPF.


The statement said: "On the contrary the agreements we have reached with Tata are based on the understanding that all members will have the opportunity to choose whether to move to a new modified scheme or remain in the BSPS and so enter the PPF."


It added that pension experts had told the union that a modified scheme would offer better outcomes than the PPF for the vast majority of their members.


A PPF spokesman said it expected discussions with Tata to conclude soon.





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