Steelworkers from Hartlepool urged to have their say about pension scheme
Steelworkers from Hartlepool have been urged to have their say about the future of their pension scheme.
Letters from the British Steel Pension Scheme are arriving at the homes of the 130,000 scheme members across the country this week as part of a huge public consultation process.
That will include many of the 500 workers from the Tata Steel plant in Brenda Road, Hartlepool.
The future the plant was thrown into doubt earlier this year when the firm announced its intention to sell all UK assets.
Based on the information available following Tata Steel’s announcement regarding UK portfolio restructuring, it looks increasingly likely that the British Steel Pension Scheme will be required to go into the Pension Protection Fund.
Although the Pension Protection Fund provides a safety net for pension schemes generally, entry would significantly reduce future pension increases for all members of the British Steel Pension Scheme and, for 58,000 people under the age of 65, result in cuts in pensions of at least 10%.
Allan Johnston, chairman of the board of trustees of the British Steel Pension Scheme, said: “I have written to scheme members setting out why the trustee believes it is better and fairer to use the scheme’s assets to provide modified benefits under the scheme than to hand the assets over to the Pension Protection Fund.
“The modified benefits would be more generous for the vast majority of members than Pension Protection Fund compensation.
“Although it is correct that the modification being consulted on by government would see future pension increases being reduced, they would be no lower than those offered by the Pension Protection Fund and in many cases they would be higher.
“In addition, members under the age of 65 would not be subject to a reduction of at least 10%, which would apply if the scheme entered the Pension Protection Fund.
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“Not everyone responding to the public consultation will necessarily do so with the best interests of the scheme membership in mind.
“It is vitally important that scheme members have their voices heard.”
The future of Tata Steel UK may not be decided until after the EU referendum.
Experts were expecting a shortlist of bidders for Tata Steel’s remaining UK business to be revealed by the end of this week.
But the future of Tata Steel UK is unlikely to be decided until after the EU referendum on Thursday, June 23.
Three suitors are thought to be in the running and they are management buyout team Excalibur, commodities trader Liberty House, run by tycoon Sanjeev Gupta, and Leeds-based private equity group Endless.
It is understood that professional advisory firm KPMG, which is handling the sales process, has been reviewing up to seven bids that were submitted by the deadline on May 23.
Reports also suggest that Tata is now considering keeping the rest of its British operations in light of the Government’s support package.