Steel pensions rescue

A NEW pension scheme will be set up to take on members of the heavily indebted British Steel retirement fund.

Tata Steel is separating the British Steel Pension Scheme (BSPS) from its main business after months of talks.

The 130,000 members can choose to stick with BSPS as it joins the pensions’ lifeboat, or join the new scheme. The arrangement was announced yesterday, resolving a major headache for Tata Steel UK and a stumbling block to a merger with ThyssenKrupp. Tata Steel will pay £550m into BSPS and give it a 33pc equity stake in the UK business.

Unions agreed in February to close BSPS to new contributions in return for Tata investing £1bn in its UK operations and trying to avoid compulsory job cuts until 2021.

Tata argued the scheme, with its estimated deficit of between £1bn to £2bn, threatened its business in the UK, which it briefly planned to sell during a major sector downturn in 2016.