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New Tata Steel UK pension scheme to be set up after meeting criteria

Some 25,000 scheme members failed to opt to transfer into the new scheme, meaning they end up in a lifeboat known as the Pension Protection Fund by default

Reuters  |  London 

Green shoots as Tata Steel's UK pension drama ends
Tata Steel announced that it had received confirmation from The Pensions Regulator that it had approved a Regulated Apportionment Arrangement (RAA) with respect to the BSPS

A new backed by UK, a unit of India's Tata Steel, will be set up after meeting minimum size and funding criteria, paving the way for the firm's merger with Germany's

The of the Pension Scheme (BSPS), a 124,000 member final salary scheme from previous owner British Steel, said in a statement the new BSPS would go ahead on March 28 as planned.

"This is very good for the 83,000 members who wanted to receive their benefits from the New Scheme and chose to switch to it," said Alan Johnston, who will now act as to the of the New BSPS.

Britain's regulator agreed a deal last year to allow UK to cut scheme benefits and set up a new BSPS in return for a 550 million pound one-off payment to the scheme.

UK remains the formal backer of the New BSPS.

Earlier this year, UK lawmakers said Britain's markets watchdog was too slow to prevent "vulture" financial advisers from ripping off steelworkers faced with critical decisions over their 14 billion pound ($19.6 billion) pension scheme.

Some 25,000 scheme members failed to opt to transfer into the new scheme, meaning they end up in a lifeboat known as the (PPF) by default, potentially a worse outcome for them.

Alternatively, some of the 25,000 might have opted to transfer their pension into other investments, but many who took that option were encouraged by dubious financial advisers to sign up to risky, unsuitable investments.

After Tata's pension hurdle was overcome last year, and Tata agreed to merge their European to create the continent's No.2 steelmaker. The deal is expected to be finalised late this year.

First Published: Wed, March 14 2018. 22:58 IST
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