Steel giant Tata warns workers of £2billion pensions shortfall

Tata Steel, Brenda Road, Hartlepool.
Tata Steel, Brenda Road, Hartlepool.
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Steel giant Tata – which has a huge presence in Hartlepool – has warned that its pension scheme is heading for a huge shortfall of £2 billion.

 It comes as members of the Community, Ucatt and GMB unions have been voting on whether to launch a campaign of action in protest at plans to close the British Steel Pension Scheme to future accrual. The proposed changes to the scheme could see workers retiring at 65 instead of 60.

Our actions have been aimed at developing an affordable and sustainable pension scheme through changes that are fair and balanced for all those who work for us – from the younger generation to our longer serving team members

Karl Koehler, chief executive of Tata Steel’s European operations

The unions urged their members to vote in favour of strike action and for other forms of industrial action.

Ballot results were due yesterday, while Unite members are still voting until next week.

Chief executive of Tata Steel’s European operations Karl Koehler sent an open letter to workers urging them not to support industrial action.

It said: “Our actions have been aimed at developing an affordable and sustainable pension scheme through changes that are fair and balanced for all those who work for us, from the younger generation to our longer-serving team members who have given most of their lives to the UK steel industry.

“The past few years have seen the UK, and most of the world, go through the worst financial crisis for generations. One of the consequences has been record low interest rates. And like savings in the bank, our pension scheme’s assets have not been growing fast enough to keep up with increases in the expected cost of providing benefits.

“The result has been a huge shortfall of up to £2 billion, which is clearly not sustainable.”

Talks were held last week but failed to break the deadlock. Tata has a plant in Brenda Road in Hartlepool.