UK business minister Sajid to discuss pension scheme with trade unions on Thursday

Trade unions say 3-6 months timeline for sale of asset not enough

After the UK business minister Sajid Javid met Tata Steel chairman Cyrus Mistry here in Mumbai, the minister has now scheduled a meeting with representatives of trade union on Thursday at 12 pm GMT, where the status of the British pension scheme for Tata Steel workers will be discussed in detail.

As per the legislation, should the sale of the UK business take place, pensions will not get transferred to the new owner. In such a scenario it is important to get clarity on the fate of the scheme holders as Tata Steel's entire idea to sell the plant is to stop the cash drain.

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"We need to know the implications of this sale on the British Pension Scheme as the liability is huge with fate of 140,000 workers (retired and active) at stake," said Harish Patel, national officer (metals and foundary) at Unite told Business Standard.

As on March 31, 2016, Tata Steel has already fallen short of paying 4.7 million pounds to its pensioners, said sources close to the development.

"Going ahead we need to protect this scheme and our aim is to not allow the scheme to go under pension protection fund run by the UK government as it yields very little for the pensioners. Pensioners will get a minimum amount under that fund," explained Patel.

Apart from meeting with the minister on Thursday, trade unions have asked for an urgent meeting with Koushik Chatterjee, executive director (corporate and finance) in order to know the stance of the company on the pension issue.

"Sajid has also claimed that he has managed to get an extension from Tata Steel in terms of the sale process," said another trade union source. "But it remains to be seen what this extension period is, if it is six months or so, that is not enough," he said.

While the action plan to sell the 10 million tonne capacity in the UK is catching pace, speculation that Thyssenkrup, Greybulls and Liberty House have shown interest in buying the asset.

"We do not know how many have actually placed the expression of interest if they have. But what we are keen on knowing at the moment is the clarity on the implications on the British Pension Scheme," said Patel.

Tata Steel, the country's largest steel producer, has been struggling to turn around its European operations for quite some time now. Going ahead, how the company manages to get this burden off its balance sheet remains to be seen.