Union members have voted in favor of proposals by the sponsoring employer of the £13.3 billion ($16.6 billion) British Steel Pension Scheme, London, which include plans to freeze the plan.
As part of the package of proposals by the company, the pension fund would be frozen on March 31 and a new defined contribution plan would be introduced. This plan would offer maximum employer contributions of 10% based on a 6% employee contribution.
Three unions reported Wednesday that consultative ballots approved sponsoring employer Tata Steel U.K.'s proposals to secure the future of the pension fund. The move is part of plans by parent firm Tata Steel Ltd., which launched a process to sell the U.K. business last April.
The proposals aim to secure the future of the pension fund without it falling into the U.K.'s lifeboat fund, the Pension Protection Fund, London.
Each of the three unions said more than 70% of votes were in favor of the proposals.
The fund's trustees welcomed the result of the vote. “The closure of the scheme is an important step in securing its future outside of the PPF and better pension benefits for members than is available to them under the existing PPF rules,” said Allan Johnston, chairman of the BSPS, in a statement provided by a spokeswoman. “We continue to have constructive discussions with Tata Steel, (the U.K.) government and The Pensions Regulator about how the scheme will be supported in future. These discussions are ongoing and no decision has been taken.”
Roy Rickhuss, general secretary of Community, one of the three unions, said in a news release: “This result provides a clear mandate from our members to move forward in our discussions with Tata and find a sustainable solution for the British Steel Pension Scheme. We now expect Tata to make good on its promises and deliver the investment plan for the whole of their steel business.”