Union Leaders told Tata Steel to boost future payouts to UK pensioners, after the company revealed a significant surplus in its retirement scheme following the recent changes to the scheme.
After the restructuring of the British Steel Pension Scheme this year, about two-thirds of its 120,000 members opted to transfer into a new £10.6bn fund with reduced benefits. The new UK scheme has a £2.2bn non-cash accounting surplus, which is higher than expected, but shows the value in reducing long-term liabilities by pegging future increases in payouts to a lower measure of inflation.
The pension overhaul was agreed by Tata and trade unions in late-2016, as part of a rescue package to ensure the survival of Britain’s largest steelmaker and unlock £1bn worth of investment over a decade. Tata then wrote a £554m cheque and gave the pension scheme a 33 per cent stake in the UK business.