A plan to secure Tata steelworkers’ pensions has been given the green light by regulators.
The Pensions Regulator has approved a new Regulated Apportionment Arrangement (RAA) in respect of the old British Steel Pension Scheme (BSPS), which has now been separated from Tata Steel UK and a number of affiliated companies.
Workers voted earlier this year to accept lower benefits in return for investment to secure jobs.
The move is expected to clear the way for Tata to merge its European steel business with German firm Thyssen Krupp.
As part of the deal, Tata Steel UK has made a £550million paymenmt to the BSPS and shares in Tata Steel UK, equivalent to a 33% stake in the company, have been issued to the Trustee.
Tata Steel UK has also agreed to sponsor a proposed new pension scheme, subject to certain qualifying conditions being met, and all members of the BSPS will be invited to transfer to the new scheme.
If the qualifying conditions are met, members who choose to, will transfer to the new scheme.
Koushik Chatterjee, Tata Steel’s group executive director, said: “The completion of the RAA follows many months of hard work to provide the most sustainable outcome for pensioners, current employees and the business.
“I would once again like to extend my gratitude to all the stakeholders – in particular The Pensions Regulator, Pension Protection Fund, the Trustee of the British Steel Pension Scheme, its members, the unions, our employees and the Governments of the UK and Wales,” he added.
“Without their significant time and effort, as well as constructive engagement, this process would not have been completed.
“Although much work is still needed to ensure the business is competitive in future, the next step in this pensions process involves necessary formalities to set up the new scheme with a lower-risk profile following the necessary member consent process led by the trustee.”