Corus will close the British Steel defined benefit (DB) pension scheme to new members as well as cutting 3,500 jobs from its global workforce in order to cut costs amid falling demand for steel.
Although the DB scheme is in a healthy position, currently fully funded and running at a surplus of £547million, it will close to new recruits within the next six months. Company contributions to future service for existing members will also be capped at 12% and new recruits will be enrolled into a defined contribution (DC) scheme.
A spokesman for Corus, owned by India’s Tata Steel, said: “[These changes] are in the best interests of the business. It is a prudent step to take and one that is in line with current market practice.”
The changes to the pension scheme come as Corus announced 3,500 job cuts, with around 2,500 jobs set to be axed in the UK where it currently employs 20,000 staff.
A spokesman for Corus said a comprehensive range of redundancy packages and outplacement support services will be made available to those leaving the company.