Tata Steel UK employees who are members of the GMB, Unite and Community trade unions have voted in favour of the organisation’s latest pension proposal, which will see the closure of the British Steel pension scheme (BSPS) to future accrual.
Consultative ballots on the proposal closed yesterday (Wednesday 15 February 2017), with 69% of Unite members, 71% of Community members, and 52% of GMB members casting their vote. More than three-quarters (76%) of Unite members, 72% of Community members, and 74% of GMB members voted in favour of the proposal.
The proposal includes the closure of the current defined benefit (DB) pension scheme to future accrual on 31 March 2017. This would then be replaced with a defined contribution (DC) arrangement, with a maximum employer contribution of 10% and employee contributions of 6%.
Employees who are members of the new DC scheme would receive death-in-service benefits at four times qualifying earnings and income protection of 50% of qualifying earnings for up to two years.
In addition, a one-off payment of up to £10,000 could be made to compensate members of the DB pension scheme over the age of 50 that want to retire from the age of 60.
The offer also includes a £1 billion investment plan and protection against compulsory redundancies until 2021.
The accepted proposal comes after the refusal of a previous proposal put forward by Tata Steel UK, where the DC pension scheme would have employer and employee contributions of 3%.
Allan Johnston, chairman of the British Steel pension scheme, said: “The trustee of the British Steel pension scheme welcomes the result of the Tata Steel UK staff ballot. The closure of the scheme is an important step in securing its future outside of the PPF [Pension Protection Fund] and better pension benefits for members than is available to them under the existing PPF rules. We continue to have constructive discussions with Tata Steel, HM Government and the Pensions Regulator about how the scheme will be supported in future. These discussions are ongoing and no decision has been taken.”
Dave Hulse, national officer at GMB, said: “Now that steelworkers have done their bit, it is time for the government [to] step up and do theirs. Thousands of skilled jobs rely on steelmaking and the industry supports the whole UK manufacturing sector. Instead of insulting steelworkers by classing their industry as a ‘low priority’, the government [must] set out a strategy for steel that recognises it as a high priority for investment and innovation.”
Tony Brady, national officer at Unite, added: “This is not a decision our members have taken lightly. It has been a hellish time for them, their families and their communities as uncertainty has swirled around the steel industry over this past year or more.
“During that time steelworkers have made great sacrifices to ensure the UK’s world class steel industry has a future. Those sacrifices must be repaid by Tata Steel honouring its commitments on investment and job security. Nothing less would be a betrayal and add to the deep mistrust that steelworkers now have for the [organisation].”
Roy Rickhuss, general secretary at Community, said: “This result provides a mandate from our members to move forward in our discussions with Tata and find a sustainable solution for the British Steel Pension Scheme.
“Steelworkers have taken a tough decision and have shown they are determined to safeguard jobs and secure the long-term future of steelmaking. Nobody wanted to be in this situation, but as we have always said, it is vital that we now work together to protect the benefits already accrued and prevent the BSPS from free-falling into the PPF.”