Tom has reacted to reports in today’s Financial Times that Tata plans to close its pensions scheme next year.
The British Steel Pension Scheme’s (BSPS) deficit was seen as a significant barrier to the sale of Tata steel’s UK plants to new operators. The scheme’s deficit, earlier this year estimated at £700m, was recently re-estimated at a far lower £50m. Despite this apparent improvement in the scheme’s health, the Financial Times today reports Tata plan to close the scheme next year, just before the company is due to make a £60m recovery plan payment, promised to the BSPS’s trustees last year.
If the reports are accurate, the BSPS would cease to accept further contributions to the scheme, although it would continue to pay out to existing members. Unions, including Community, previously threatened to strike over a plan to close the final salary scheme in 2015.
Tom, who also chairs the All Party Parliamentary Steel Group, said:
I hope Tata will clarify their plans for the British Steel Pension Scheme. The uncertainty over the future of steelworkers’ pensions affects not only the 130,000 members of the scheme but the future of the steel industry in the UK.
Tata can’t be allowed to break promises to workers and pensioners, merely to cut their costs. I hope the Pensions’ Regulator and unions will be able to examine Tata’s plans to ensure they are acting like what they have always promised to be: a responsible employer.
The trustees of the scheme had previously outlined a plan to make the scheme function independently of Tata, on which the government consulted. The consultation process closed in June. The government is yet to outline its response to this consultation.