Tata Steel U.K. will freeze the £13.3 billion ($16.3 billion) British Steel Pension Scheme at the end of the month, the sponsoring employer said in a statement Tuesday.
“From April 1, British Steel employees will save through a new defined contribution plan,” according to the statement from the steel producer,
This plan would offer maximum employer contributions of 10% based on a 6% employee contribution.
Tata Steel's spokesman said that the defined benefit plan had 8,500 active members and they will be added to the DC section of BSPS. He was unable to confirm by press time if a new pension provider will be contracted for the new plan.
Legal and General currently manages the assets of the current DC section. British Steel union members voted in favor of the proposal by the sponsoring employer to freeze the defined benefit plan last month after a consultation process with Tata Steel.
“The company believes that finding a structural solution to address the risks from the pension scheme to the viability of the business is a crucial part of its ongoing UK transformation plan,” Tata Steel said in the statement.