Tata Steel, U.K. back pension changes
LONDON — Tata Steel and British authorities said Friday that they have agreed on a plan to restructure the firm’s British pension system, ending one aspect of uncertainty for 130,000 current and retired steelworkers.
Indian-owned Tata announced plans last year to sell its U.K. operations, including the Port Talbot steelworks in Wales. But after interventions from the British government and unions, it agreed to keep the business, which employs 8,000 people in Britain.
A sticking point was $19.5 billion in British pension liabilities, which Tata considered onerous. Steelworkers voted this year to accept lower benefits if it meant protecting jobs.
Tata Steel U.K. said Friday that it had signed an arrangement with pension trustees to separate the plan from the company, in exchange for a $715 million cash injection and stake for the pension fund in Tata’s business.
The deal addresses one obstacle to a proposed merger between Tata’s British businesses and Germany’s Thyssenkrupp.
Unions welcomed the agreement, saying it helped end members’ uncertainty about their retirement income.