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Tata to confirm British Steel pension scheme to be closed

Pensions expert Stuart Price, Partner and Actuary at Quantum Advisory, gives his thoughts on the news that the old British Steel pension scheme is to be closed…

Stuart said: “Negotiations have been ongoing for some time and we are expecting an official announcement that the old scheme has been replaced with the new scheme any day now.

“The importance with these deals is that the Sponsoring Employer – Tata Steel in this case – has to prove to the Pensions Regulator and the Pension Protection Fund (PPF) that if no deal is done then by having to continue supporting the pension scheme it will drive them insolvent.

“When a deal like this is made, the pension scheme generally enters the Pension Protection Fund (PPF) and the sponsoring employer makes a one off contribution to the pension scheme and the PPF get a stake in the sponsoring employer. The latter is an anti-embarrassment clause in case the sponsoring employer’s fortunes do drastically take an upturn.

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