Tata Steel pension scheme edges towards safety

 
Oliver Gill
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Tata Prepares To Sell British Steel Operation
The announcement by the trustee indicates Tata Steel is one step closer to safety (Source: Getty)

Tata Steel is one step closer to saving its £15bn retirement scheme from falling into the government's pension lifeboat.

A statement from the British Steel Pension Scheme trustees revealed Tata Steel had initiated talks with both scheme trustees and "relevant regulatory bodies".

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Tata Steel, the UK's largest steelmaker, said in December it had reached an agreement with trade unions on a shake-up to the firm's pension scheme.

The firm is eager to close the scheme going forward and separate it from the business. The trustees would then run the scheme with a pool of assets sufficient to meet members' liabilities.

German industrial group Thyssenkrupp is currently in talks with Tata Steel to buy the firm's European assets – it is a deal that will only will only go ahead if the pension changes can be driven through.

Read more: Tata and unions agree to rescue plan for the Port Talbot steel works

Under current proposals, Tata also wants to cut pension members' benefits, but keep them at a higher level compared with what could be expected if the scheme fell into the government's pension lifeboat, the Pensions Protection Scheme.

The trustees wrote in a statement:

Tata Steel has indicated that it believes the ability to achieve a sustainable future for the UK business is dependent on the structural de-risking and de-linking of British Steel Pension Scheme from the business.

Tata Steel is now in discussions with the Trustee and the relevant regulatory bodies on how this might be achieved.

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