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Tata Steel: Pension cut plan would be 'unique' to company

Business Secretary Sajid Javid has confirmed the Government is set to launch a consultation on changes to pensions law as part of efforts to save Tata Steel despite being "very wary of setting a precedent".

The changes would leave steelworkers worse off in retirement - but they would still fare better than many employees in other pension schemes.

Former Liberal Democrat Pensions Minister Steve Webb warned the government is "going down a very dangerous path" in seeking to change the pension laws but Mr Javid said the plan for Tata would be 'unique' to the company.

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Steel trade unions welcome Tata pension law consultation

The steel trade unions have welcomed the Government's consultation on changes to pensions law as part of efforts to save Tata Steel and called on the company to uphold its "legal, social and moral responsibilities" to steel workers.

In a combined statement, Community, Unite and GMB endorsed the move to avoid the "unmitigated disaster" of the British Steel Pension Scheme (BSPS) going into the financial safety net of the Pensions Protection Fund (PPF) with a sale of Tata's assets.

It is important that all stakeholders continue to explore all available options that avoid the need for the scheme to go into the PPF, which would be the worst deal for scheme members.

It is important to remember that Tata Steel remains the employer and sponsor of the BSPS. They have significant legal, social and moral responsibilities with regards to the British steel industry and those men and women who have worked and continue to work within it.

– Community, Unite and GMB
Steel unions said they would continue to be 'led by our members' in the industry. Credit: PA Wire

The Human Resources director for Tata Steel's European operations said the consultation would enable a "better outcome" for the vast majority of members of the BSPS.

We welcome the inclusion of an option to change the way that future payments in the scheme are increased. This option, which is fully supported by the pension scheme's trustees, provides a way for the scheme to continue to operate on a well-funded, low-risk basis indefinitely.

The British Steel Pension Scheme was set up on the basis that pension increases would be provided so long as they remained affordable. The proposed legislative changes would allow this unusual rule to operate as intended. That means it's unlikely that a regulatory change would affect other final salary pension schemes.

– Tor Farquhar, Human Resources director for Tata Steel's European operations
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Tata Steel: Pension cut plan would be 'unique' to company

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