LONDON Feb 15 Tata Steel's British
workers voted on Wednesday to accept pension benefit cuts in
return for safeguards on jobs and investment, although the
Indian-owned firm's plan to spin off its entire pension scheme
still faces regulatory hurdles.
Wednesday's vote allows Britain's largest steelmaker to
close its 15 billion pound ($18.7 billion) British Steel Pension
Scheme (BSPS) to future accrual and replace the final salary
scheme with a less generous defined contribution scheme.
"Steelworkers have made great sacrifices ... Those
sacrifices must be repaid by Tata Steel honouring its
commitments on investment and job security. Nothing less would
be a betrayal and add to the deep mistrust that steelworkers now
have for the company," said Unite the Union's national officer
In return for pension changes, Tata Steel has pledged to
guarantee production at its flagship steel plant in Port Talbot,
Wales, for five years and to invest 1 billion pounds in its
British business over the next decade.
The company's new defined contribution scheme will cover its
existing 11,000 UK employees. The firm is however seeking
regulatory approval to cut benefits for all 130,000 BSPS members
and to spin off the scheme into a standalone entity.
Tata Steel is currently in talks to merge its European and
UK assets with Germany's Thyssenkrupp, but the German
steelmaker is not prepared to take on Tata's UK pension
liabilities in the event of a tie-up.
($1 = 0.8025 pounds)
(Reporting by Maytaal Angel; Editing by Keith Weir)