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Tata Steel Workers Agree to Pension Cuts to Save 8,000 Jobs

Accepted submission by n1 at 2017-02-16 05:04:22
Career & Education

Tata Steel UK workers have voted in favour of proposals to turn around the struggling business, potentially saving 8,000 jobs but also leading to cuts to their pension benefits.

Workers from the Community, Unite, and GMB unions all backed the plan in separate ballots. Approximately three-quarters of votes supported the proposals, which involve saving the Port Talbot steelworks in south Wales.

[...] Tata Steel had proposed saving 8,000 jobs in its UK business and the Port Talbot steelworks by investing £1bn in modernising its operations over the next 10 years.

This investment depends on spinning off the pension fund into a separate entity and replacing the final salary pension scheme with a less generous contribution scheme.

The existing scheme – the British Steel pension scheme (BSPS) – could enter the Pension Protection Fund (PPF) as part of the arrangement, which would result in a 10% cut to members’ benefits. For this to occur Tata Steel must convince the Pensions Regulator that its UK business is on the brink of insolvency and is likely to have to pump hundreds of millions of cash into the scheme.

[...] The jobs have been at risk since last March when Tata Steel announced it was putting its UK business up for sale amid losses of more than £1m a day. The decision sparked a political crisis as the government scrambled to secure the future of the Port Talbot plant. Port Talbot is one of only two sites in Britain that makes steel in blast furnaces.

The government welcomed the result of the vote. A spokesperson said: [...]

“It is testament to the commitment of its workforce that they are willing to work so constructively with the owners to secure the future of the plant. The government will play its role in supporting the steel industry to help deliver a sustainable future.”

Source: The Guardian [theguardian.com]


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