News: Steel pension problems remain
Proposals from Tata Steel to amend pension scheme benefits in order to avoid entering the Pension Protection Fund (PPF) now appear as if they would be difficult to deliver.
Earlier this year, the Government launched a consultation on changes to the British Steel Pension Scheme (BSPS) - the huge pension liability with a £700m deficit that could be a deal-breaker for prospective buyers of Tata Steel's UK assets.
The consultation follows intense discussions between Tata Steel, the UK government, the pension scheme trustees and regulators to find the best option for members of the scheme.
At the end of March, the Indian-owned steelmaker concluded that it is exploring all options for portfolio restructuring including the potential sale of Tata Steel UK, in whole or in parts. Following a board meeting in July, the steelmaker decided on a separate process for the potential sale of its Speciality Steels business, which until recently employed over 2,000 people at sites like Aldwarke in Rotherham and Stocksbridge in Sheffield.
Last week representatives of Community, Unite and GMB met with Tata Steel management in London to discuss the ongoing situation with the BSPS.
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The consultation was seen as the first step in a potential unprecedented change to regulations which would enable the scheme to modify its benefits enabling it become self-sustaining and remain outside of the Pension Protection Fund (PPF) - the safety net that provides compensation to members of eligible defined benefit pension schemes when things go wrong.
The PPF updated its guidance last month, working to ensure employers do not "dump" schemes in the PPF.
The unions now say that during the meeting, Tata made it clear that the previous proposals to amend scheme benefits in order to avoid entering the PPF now appeared as if they would be difficult to deliver.
A joint statement said: "This leaves the BSPS facing the very real possibility of being dumped entirely into the PPF as part of Tata's plan to divest its UK assets.
"All trade unions involved have previously made it clear that such an outcome would be unacceptable.
"Tata management expressed a desire to explore other options for the BSPS, however the unions are clear that no such further discussions can take place until Tata clearly sets out its long term commitment to the UK industry.
"It has been over five months since Tata first announced its desire to sell its UK operations and yet steelworkers and their families are even less clear about their future now.
"The delayed sales process, the prospect of Tata remaining and now the proposed merger with ThyssenKrupp have all served to create uncertainty for Tata's loyal workforce and the wider industry.
"The unions made it clear that through these actions Tata has lost the trust and confidence of the workforce and therefore the company must clearly and urgently set out its intentions and its plans to act as either a responsible owner or seller."
Tata Steel website
Images: Tata Steel
Earlier this year, the Government launched a consultation on changes to the British Steel Pension Scheme (BSPS) - the huge pension liability with a £700m deficit that could be a deal-breaker for prospective buyers of Tata Steel's UK assets.
The consultation follows intense discussions between Tata Steel, the UK government, the pension scheme trustees and regulators to find the best option for members of the scheme.
At the end of March, the Indian-owned steelmaker concluded that it is exploring all options for portfolio restructuring including the potential sale of Tata Steel UK, in whole or in parts. Following a board meeting in July, the steelmaker decided on a separate process for the potential sale of its Speciality Steels business, which until recently employed over 2,000 people at sites like Aldwarke in Rotherham and Stocksbridge in Sheffield.
Last week representatives of Community, Unite and GMB met with Tata Steel management in London to discuss the ongoing situation with the BSPS.
Advertisement
The consultation was seen as the first step in a potential unprecedented change to regulations which would enable the scheme to modify its benefits enabling it become self-sustaining and remain outside of the Pension Protection Fund (PPF) - the safety net that provides compensation to members of eligible defined benefit pension schemes when things go wrong.
The PPF updated its guidance last month, working to ensure employers do not "dump" schemes in the PPF.
The unions now say that during the meeting, Tata made it clear that the previous proposals to amend scheme benefits in order to avoid entering the PPF now appeared as if they would be difficult to deliver.
A joint statement said: "This leaves the BSPS facing the very real possibility of being dumped entirely into the PPF as part of Tata's plan to divest its UK assets.
"All trade unions involved have previously made it clear that such an outcome would be unacceptable.
"Tata management expressed a desire to explore other options for the BSPS, however the unions are clear that no such further discussions can take place until Tata clearly sets out its long term commitment to the UK industry.
"It has been over five months since Tata first announced its desire to sell its UK operations and yet steelworkers and their families are even less clear about their future now.
"The delayed sales process, the prospect of Tata remaining and now the proposed merger with ThyssenKrupp have all served to create uncertainty for Tata's loyal workforce and the wider industry.
"The unions made it clear that through these actions Tata has lost the trust and confidence of the workforce and therefore the company must clearly and urgently set out its intentions and its plans to act as either a responsible owner or seller."
Tata Steel website
Images: Tata Steel
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