Tens of thousands of steelworkers in the UK could have their pensions slashed by up to 20 per cent under plans by Tata to wash its hands of the 15 billion pounds British Steel retirement scheme, media reported on Sunday.
According to a report in the Sunday Times, the Indian conglomerate is understood to be in negotiations with the government and the Pensions Regulator over putting the scheme, which has about 130,000 active and retired members, into the Pension Protection Fund (PPF), which would mean workers suffer cuts to their retirement savings of as much as 20 per cent.
last week Tata said UK's largest steelworks, at Port Talbot in South Wales, was no longer viable and put its entire British steel operation up for sale, leaving 15,000 jobs hanging in the balance.
Sources close to the company said it does not plan to continue supporting the pension fund once it has quit UK steel, according to the report.
"There is no possibility whatsoever [it will retain the pension scheme]," said one source. "legally it can do it."
The scheme is one of Britain's biggest — a throwback to when the industry employed hundreds of thousands of workers.
It has a deficit of 485 million pounds, but with assets of almost 14 billion pounds, it is in fairly healthy shape.
Amid the pension talks, Sanjeev Gupta, the Indian origin steel tycoon, has made an alternative proposal to replace Port Talbot's blast furnaces with more efficient electric arc furnaces.