News: Unions in strike threat over Tata Steel's pensions plan
Unions are warning of industrial action as Tata Steel proposes to close its pension scheme, adding that they "have lost all faith in the company and its leadership."
At a mass meeting of trade union representatives from across Tata Steel's UK operations, which includes sites in Rotherham and Sheffield, senior managers from Tata Steel announced their intention to close the British Steel Pension Scheme (BSPS) to future accrual.
A legacy from before British Steel was acquired in the Anglo-Dutch Corus takeover, the fund's assets reached an all-time high of £13.6 billion in 2014.
With the prospect of no new members joining or any further benefits or entitlements being built up under the scheme, steel unions are now preparing to ballot their members for industrial action.
Roy Rickhuss, general secretary of the Community trade union and Chairman of the National Trade Union Steel Coordinating Committee, which includes national representatives from Community, Unite and the GMB, said: "Tata Steel's decision to close the BSPS is unnecessary and profoundly disappointing. It is not a position we expected to find ourselves in given that trade unions have been in discussions with the company since early November. Throughout a long process we have acted in good faith and negotiated constructively in trying to reach an agreement which addresses what we acknowledge to be a significant deficit in the scheme.
"We have made every effort to compromise with the company, even discussing the possibility of meeting the deficit through changes to member benefits, despite the fact the company is legally obliged to pay for the deficit and has always done so in the past.
"Sadly, the company rejected this offer out of hand. It appears they are hellbent on closing the scheme and are not prepared to compromise. We have lost all faith in the company and its leadership, which has brought us to the brink of a major national industrial dispute for the first time in over 30 years. The senior management of Tata Steel Europe should seriously consider their positions for bringing about this total breakdown in trust.
"We feel we have no option but to consult our members and prepare to ballot for industrial action to defend their hard won pension rights."
Tata Steel will begin a statutory 60-day consultation about the changes on March 23. The company is proposing closure of the scheme on April 1 2016.
Terms were agreed between the company and the trade unions in 2012 for new members to accrue pension savings on a defined contribution basis.
In October 2014, Indian-owned Tata Steel Europe refinanced its bank debt through term loan and revolving credit facilities of €3.05 billion as it tackled the existing debt of the operations it bought in 2007 when it was know as Corus. The outcome was achieved to assist the company with no detriment to the pension scheme's security position.
The Tata company funded its acquisition of Corus in significant part by debt, raised both in India and overseas, and as a result Tata had sizeable repayment and debt servicing obligations on an ongoing basis.
In 2013, Tata Steel announced a $1.6 billion writedown on its assets, mainly on the European operations that have suffered from a market slowdown and rising raw material prices since Corus joined the Tata Steel family in a $10 billion transaction. A write down reduces the book value of an asset if it is overstated compared to current market values.
In July 2014, $1.5 billion was raised by the Mumbai group as it began to tackle its debt of $7 billion with new bonds listed on the Frankfurt Stock Exchange.
Over 2,000 people are employed by the company in South Yorkshire where sites like Stocksbridge in Sheffield and Aldwarke in Rotherham, focus on exceptional high-value products and sectors.
Tata Steel is creating a new R&D centre at the University of Warwick, a move that signals the end for its Research & Development (R&D) site in Rotherham.
Tata Steel Europe website
Images: Tata Steel
At a mass meeting of trade union representatives from across Tata Steel's UK operations, which includes sites in Rotherham and Sheffield, senior managers from Tata Steel announced their intention to close the British Steel Pension Scheme (BSPS) to future accrual.
A legacy from before British Steel was acquired in the Anglo-Dutch Corus takeover, the fund's assets reached an all-time high of £13.6 billion in 2014.
With the prospect of no new members joining or any further benefits or entitlements being built up under the scheme, steel unions are now preparing to ballot their members for industrial action.
Roy Rickhuss, general secretary of the Community trade union and Chairman of the National Trade Union Steel Coordinating Committee, which includes national representatives from Community, Unite and the GMB, said: "Tata Steel's decision to close the BSPS is unnecessary and profoundly disappointing. It is not a position we expected to find ourselves in given that trade unions have been in discussions with the company since early November. Throughout a long process we have acted in good faith and negotiated constructively in trying to reach an agreement which addresses what we acknowledge to be a significant deficit in the scheme.
"We have made every effort to compromise with the company, even discussing the possibility of meeting the deficit through changes to member benefits, despite the fact the company is legally obliged to pay for the deficit and has always done so in the past.
"Sadly, the company rejected this offer out of hand. It appears they are hellbent on closing the scheme and are not prepared to compromise. We have lost all faith in the company and its leadership, which has brought us to the brink of a major national industrial dispute for the first time in over 30 years. The senior management of Tata Steel Europe should seriously consider their positions for bringing about this total breakdown in trust.
"We feel we have no option but to consult our members and prepare to ballot for industrial action to defend their hard won pension rights."
Tata Steel will begin a statutory 60-day consultation about the changes on March 23. The company is proposing closure of the scheme on April 1 2016.
Terms were agreed between the company and the trade unions in 2012 for new members to accrue pension savings on a defined contribution basis.
In October 2014, Indian-owned Tata Steel Europe refinanced its bank debt through term loan and revolving credit facilities of €3.05 billion as it tackled the existing debt of the operations it bought in 2007 when it was know as Corus. The outcome was achieved to assist the company with no detriment to the pension scheme's security position.
The Tata company funded its acquisition of Corus in significant part by debt, raised both in India and overseas, and as a result Tata had sizeable repayment and debt servicing obligations on an ongoing basis.
In 2013, Tata Steel announced a $1.6 billion writedown on its assets, mainly on the European operations that have suffered from a market slowdown and rising raw material prices since Corus joined the Tata Steel family in a $10 billion transaction. A write down reduces the book value of an asset if it is overstated compared to current market values.
In July 2014, $1.5 billion was raised by the Mumbai group as it began to tackle its debt of $7 billion with new bonds listed on the Frankfurt Stock Exchange.
Over 2,000 people are employed by the company in South Yorkshire where sites like Stocksbridge in Sheffield and Aldwarke in Rotherham, focus on exceptional high-value products and sectors.
Tata Steel is creating a new R&D centre at the University of Warwick, a move that signals the end for its Research & Development (R&D) site in Rotherham.
Tata Steel Europe website
Images: Tata Steel
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