Tata Steel, U.K. back pen­sion changes

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM -

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.

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