The deal that will see Tata Steel offloading its UK pension scheme has been approved by the Pensions Regulator. The £15 billion scheme was a liability that would have proved an insurmountable stumbling block to the firm's planned merger with German firm ThyssenKrupp had the company not been able to separate it from the business, but a deal to do this has now got the green light.
All 130,000 members of the current British Steel Pension Scheme, including both former and current staff, will be invited to transfer to the new scheme. It will have lower annual increases in payments for both pensioners and deferred members than the existing scheme. However, the move will help secure the future of plants such as the Port Talbot and Scunthorpe steelworks.
Tata Steel's group executive director Koushik Chatterjee said: "Although much work is still needed to ensure the business is competitive in future, the next step in this pensions process involves necessary formalities to set up the new scheme with a lower risk profile following the necessary member consent process led by the trustee."