British Steel's pension fund shake-up clears key hurdles

Oliver Gill
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Tata Prepares To Sell British Steel Operation
Tata Steel formally announced plans to separate its UK pension scheme last August (Source: Getty)

Two key hurdles standing in the way of British Steel's controversial pension reorganisation have been overcome, scheme trustees said today.

The £15bn retirement fund is due to fall into the UK's pension protection lifeboat under a so-called Regulated Apportionment Agreement. A new British Steel Pension Scheme (BSPS) will be created thereafter.

Before the new BSPS is established certain qualifying conditions must be met. These include a minimum size and a funding test.

Read more: Tata Steel strikes deal to separate £15bn British Steel Pension Scheme

Scheme trustees said today the minimum size criterion has already been "comfortably exceeded". Actuaries and Tata Steel have agreed that the initial funding test was met on 31 January 2018. The Pension Protection Fund and the Pensions Regulator have been advised, trustees added.

Trustee chairman Allan Johnston said: "The minimum size and initial funding tests have now been met paving the way for the New British Steel Pension Scheme to go ahead on 28 March as planned. This is very good news for the 83,000 members who wanted to receive their benefits from the New Scheme and chose to switch to it.

"The trustee expects to write to members in early April to welcome them to their new pension scheme."

Read more: British Steel pension mis-selling scandal "more serious" than PPI

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