Uncertainty over new Tata pensions scheme

STEEL bosses could “pull the plug” on a new pensions scheme set up to secure the futures of 130,000 workers, a Commons committee has warned.

Tata announced details of a new fund to replace the British Steel Pension Scheme (BSPS) earlier this year after workers voted to accept lower benefits in return for investment that would secure jobs.

Finalising the pension arrangements cleared the way for the steel giant to merge its European business with German firm Thyssenkrupp.

Tata Steel UK said it had signed the documentation for a so-called regulated apportionment arrangement (RAA) with the trustee of the BSPS, offering “more sustainable outcomes” for pensioners, employees and the business”.

BSPS members can transfer to the new scheme if they meet certain conditions or remain in the existing scheme, which will transfer to the Pension Protection Fund (PPF).

But the Pensions Regulator has written to MPs to say if the new BSPS does not go ahead, all members will remain in the existing fund and move with it into the PPF.

The Commons Work and Pensions Select Committee said the fate of the scheme lies in the hands of the new owners.

Chairman Frank Field said: “It is now all too clear that the livelihoods of 130,000 British Steel pensioners lie in the hands of the new owners – a panEuropean super-giant – and not the Pensions Regulator. “Even if the vast majority of scheme members opt for the new scheme, the owners could still pull the plug and send them into the PPF. “In the event the new scheme does go ahead, the new owners will decide whether to start paying cost-of-living increases for pensions accrued before 1997, the oldest members.” The Labour MP said: “I will be writing to Thyssenkrupp and Tata to ask what assurances they can give to British Steel pensioners. “What will the mysterious qualifying criteria be? What commitments will they make to ensure the new scheme starts and stays in a healthy state? How will the interests of pensioners be represented and protected?”