More reports on: Steel

Tata Steel workers in UK to vote on new pension scheme and rescue plans

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30 January 2017

Tata Steel workers in the UK will get a ballot on a new pension offer from Monday.

The three unions at the Indian company's UK plants are urging members, including 6,300 Tata workers in Wales, to accept the deal.

They said it was the "only credible and viable way" to secure the future.

Although a less generous pension scheme is on offer, a 1-billion investment commitment at Port Talbot is also included and there would also be no compulsory job losses.

The result of the ballot would be expected by the middle of February.

Community, GMB and Unite union members are involved in the vote, following a year that had seen major jobs losses. The business was also put up for sale, but as economic conditions in the industry improved, Tata took the company off the market.

The proposed changes would see the British Steel Pension Scheme close to future accrual and be replaced with a defined contribution scheme with maximum contributions of 10 per cent from Tata and 6 per cent from workers.

The unions had originally not been in favour of making recommendations, saying it was down to individual circumstances.

However, after a meeting of 100 officials from plants across the UK on Thursday, they issued a joint statement saying the offer was the "best outcome that could be achieved through negotiation".

With 130,000 members Tata Steel UK's pension scheme was among the largest in the UK, although figures showed only one in 13 members contributed to the scheme, which the company inherited a decade ago with the acquisition of Corus.

According to commentators, in the event of the steelmaker folding, its pension scheme would fall under the Pension Protection Fund (PPF), which ensured workers received their pensions even after a company folded.

To ensure pensions were paid in the worst case scenario, annual taxes are charged on all schemes that could resort to enter the PPF should they need to do so.





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