New Tata Steel UK Pen­sion Scheme to be set up

EME Outlook - - News -

A new pen­sion fund backed by Tata Steel UK, a unit of In­dia’s Tata Steel, will be set up af­ter meet­ing min­i­mum size and fund­ing cri­te­ria, paving the way for the firm’s merger with Ger­many’s Thyssenkrupp.

The trustee of the Bri­tish Steel Pen­sion Scheme (BSPS), a 124,000 mem­ber fi­nal salary scheme from pre­vi­ous owner Bri­tish Steel, said in a state­ment the new BSPS would go ahead at the end of March as planned.

“This is very good news for the 83,000 mem­bers who wanted to re­ceive their ben­e­fits from the New Scheme and chose to switch to it,” said Alan John­ston, who will now act as chair­man to the trustee of the New BSPS.

Britain’s pen­sion’s reg­u­la­tor agreed a deal last year to al­low Tata Steel UK to cut scheme ben­e­fits and set up a new BSPS in re­turn for a £550 mil­lion one-off pay­ment to the scheme.

Tata Steel UK re­mains the for­mal backer of the New BSPS.

Ear­lier this year, UK law­mak­ers said Britain’s mar­kets watch­dog was too slow to pre­vent “vul­ture” fi­nan­cial ad­vis­ers from rip­ping off steel­work­ers faced with crit­i­cal de­ci­sions over their £14 bil­lion ($19.6 bil­lion) pen­sion scheme.

Some 25,000 scheme mem­bers failed to opt to trans­fer into the new scheme, mean­ing they end up in a lifeboat known as the Pen­sion Pro­tec­tion Fund (PPF) by de­fault, po­ten­tially a worse out­come for them.

Al­ter­na­tively, some of the 25,000 might have opted to trans­fer their pen­sion into other in­vest­ments, but many who took that op­tion were en­cour­aged by du­bi­ous fi­nan­cial ad­vis­ers to sign up to risky, un­suit­able in­vest­ments.

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