Tata Steel expected to announce new pension scheme for thousands of workers

Tata Steel seals pensions deal
Regulator approves Tata Steel pension deal
Author

11 August, 2017

It will also hand the scheme a one-third stake in the ongoing United Kingdom operations, which include the giant Port Talbot steelworks in Wales.

The Pensions Regulator (TPR) said its move to give initial approval for the restructuring came after ensuring it met "strict criteria created to stop employers abusing the RAA mechanism" and would "prevent the company becoming insolvent....we do not agree to these types of arrangements lightly but after several months of robust negotiations in this case, we believe that it is the best outcome for everyone involved in what is a very hard situation,"' said Lesley Titcomb, Chief Executive of TPR.

Koushik Chatterjee, Tata Steel's Group Executive Director, said: "The RAA process has been a long and detailed one, and I would like to thank the Pensions Regulator, Pension Protection Fund, the Trustee of the British Steel Pension Scheme, its members, the unions and employees - indeed, all our stakeholders, including the Governments of the United Kingdom and Wales, for their constructive engagement through the process".

"We'd encourage members to consider the details and their position carefully and decide whether the new scheme or the PPF is the better option for them", a PPF spokesman said.

Tata Steel said more than a year ago that it would seek to merge its European operations with the steel division of Germany's Thyssenkrupp.

The Pensions Regulator has granted "initial approval" for a regulated apportionment agreement (RAA), involving a £550m cash injection and BSPS taking a 33% stake in Tata Steel UK, its sponsoring employer.

Also, shares in Tata Steel UK would be issued to the British Steel Pension Scheme Trustee under the terms of a shareholders' agreement, which would lead to a 33 per cent economic equity stake in Tata Steel UK being held by the trustee, it said.

"The RAA is one important milestone in Tata Steel UK's journey towards a sustainable and enduring future, with pension obligations, whose risk profile would be consistent with the underlying business".

Unions welcomed the RAA and the company's commitment to the new scheme, which put an end to the uncertainty their members had faced for over a year. RAA is a mechanism which allows a financially troubled employer in the United Kingdom to detach itself from defined benefit scheme liabilities.

"If stressed pension funds were allowed to restructure in a more transparent way, a pension fund equivalent of Chapter 11, risk could be better shared between the company, the members and the PPF", Rosenberg said.

Should there be no referrals to the UK court system in the next 28 days, the Pension Regulator is expected to confirm its approval, subject to Tata Steel UK making a £550-million payment to the scheme.

Lesley Titcomb, Chief Executive of the UK's Pensions Regulator, said: "We do not agree to these types of arrangements lightly, but after several months of robust negotiations in this case, we believe that it is the best possible outcome for everyone involved in what is a very hard situation".

In February, the company's British employees voted to accept proposals to close the existing pension scheme to new contributions, in exchange for greater certainty about the future of its 8,500-strong workforce.

BSPS trustees' Chairman Allan Johnston added: "It is the best outcome that could be achieved in the circumstances".


More news


  • Willis Lease Finance Corporation (WLFC) CFO Buys 500 Shares of Stock

    If you are reading this article on another website, it was stolen and republished in violation of global copyright laws. The stock of Sealed Air Corp (NYSE:SEE) has "Outperform" rating given on Friday, February 19 by RBC Capital Markets.

    7.50% Tangible Equity Units (AEUA) Rating Lowered to D+ at TheStreet

    On average, equities research analysts predict that Occidental Petroleum Corporation will post $0.65 EPS for the current year. As of December 31, 2016, the Company had approximately 1.7 billion barrels of oil equivalent (BOE) of proved reserves.
    2 swimmers drown in Lake Superior off Duluth's Park Point

    2 swimmers drown in Lake Superior off Duluth's Park Point

    During such red-flag conditions, signs and flags are posted along Park Point, and the public beaches are closed. One Duluth firefighter was injured after he took in a large amount of water during the rescue attempt.
  • Train barely misses smashing into auto  that jumps barriers

    Train barely misses smashing into auto that jumps barriers

    CCTV footage shows the women emerging from the vehicle looking - understandably - quite dazed, but unhurt. After the train passed the stunned occupants could be seen getting out of the auto to survey the damage.

    Goldman Sachs Group Inc. Sells 75393 Shares of Oclaro, Inc. (NASDAQ:OCLR)

    The company has mean EPS estimate of 0.17 reported by 12 number of analyst for the quarter ending Current Qtr.(Sep2017). ValuEngine upgraded shares of Oclaro from a "buy" rating to a "strong-buy" rating in a report on Saturday, June 3rd.
    Morocco Will Challenge US-Led Bid for 2026 World Cup

    Morocco Will Challenge US-Led Bid for 2026 World Cup

    Morocco has lodged its bid to host the 2026 soccer World Cup, the country's football federation said in a statement on Friday. The World Cup has only been hosted once in Africa - in South Africa in 2010 - and this will be Morocco's fifth bid.
  • United Nations  expresses concern about safety of Raqqa civilians

    United Nations expresses concern about safety of Raqqa civilians

    Almost three hundred thousand internally displaced people are also in dire need of human assistance. SDF fighters reportedly encircled the ISIS terrorists in central Raqqa earlier this week.
    Sharif rejects brother for Pakistani PM in favour of wife or daughter

    Sharif rejects brother for Pakistani PM in favour of wife or daughter

    If the PML-N is happy to let politics eclipse the demands of governance, then it should go all the way and call a snap election. Earlier, the former prime minister's caravan entered Rawalpindi surrounded by scores of supporters.
    State Street Corp Acquires 4248 Shares of Tata Motors Ltd (NYSE:TTM)

    State Street Corp Acquires 4248 Shares of Tata Motors Ltd (NYSE:TTM)

    BidaskClub cut shares of Tata Motors from a "hold" rating to a "sell" rating in a research report on Wednesday, July 5th. Analysts await Tata Motors Ltd (NASDAQ: TTM ) to report earnings on Aug, 09 for the fiscal quarter ending Jun 2017.
  • Chelsea's £15m Danny Drinkwater bid rejected: Leicester want over £30m

    Chelsea's £15m Danny Drinkwater bid rejected: Leicester want over £30m

    The pair had an excellent relationship in the 2015/16 season as they played an integral role in Leicester winning the Premier League.
    USA  destroyer challenges China's claims in South China Sea

    USA destroyer challenges China's claims in South China Sea

    The United States does not recognize China's claim of sovereignty in that location and regards the area as worldwide waters. The operation occurred at an awkward and tense moment, amid the war of words between the United States and North Korea.
    Guardiola wants Manchester City to play like Barcelona - Yaya Toure

    Guardiola wants Manchester City to play like Barcelona - Yaya Toure

    Do you see Arsenal , finally, making a sustained bid? Nope. Money is nearly null and void, there's no value on things. All I'd say to Spurs supporters is to trust the manager .