... scheme, TATA STEEL has taken the first step towards closing the historic British Steel final-salary pension scheme.
... as reported by Karl West in today's Sunday Times :
The answer to TATA's problems in the UK might be alleviated if the 48% of the steel used in Britain that is currently being imported, had a "Green Tax" imposed, make it an economic imperative to make it where you intend to sell it ...
... of course energy pricing in the UK must be impacting TATA as it impacts the little people of Britain, but more of that later !
... as reported by Karl West in today's Sunday Times :
Generous final salary scheme closed to new staff as losses at steel-maker soar to £846m.
TATA STEEL has taken the first step towards closing the historic British Steel final-salary pension scheme.
The move was revealed as the Indian group’s debt-laden European arm, including the rump of British Steel, racked up a pre-tax loss of £846m in the year to the end of March 2012. It lost £379m the year before.
Accounts for Tata Steel Europe said demand for steel had been hit by the deepening crisis in the eurozone. The company also raised the amount it invested in the business by 85% to £441m, including a further £74m towards rebuilding the No 4 blast furnace at Port Talbot, South Wales.
Karl-Ulrich Köhler, head of Tata Steel Europe, last month warned it may delay lighting the £ 185m furnace if the market remains subdued.
Tata Group is a big investor in Britain — it also owns Tetley Tea and Jaguar Land Rover. The Indian conglomerate bought Corus, the Anglo-Dutch giant that included British Steel, in a £6.7 billion deal in 2007.
The European steel operation is still weighed down by borrowings of £3.4 billion. It paid £424m in finance charges to service the debt last year.
Tata Steel employs 19,000 workers in Britain. It controls 46% of the domestic steel market, with 48% of the steel used in Britain being imported and 6% provided by other home-grown companies.
Union leaders have fought to keep the steel-maker's gold-plated retirement plan open to new entrants since Tata took over Corus.
However, the latest accounts reveal that from April 2014 new starters will be enrolled in a “nursery” pension arrangement. This less generous defined-contribution scheme will give new recruits the option of entering the final-salary plan at a future unspecified date, “subject to agreed conditions being achieved regarding the strength of the British Steel Pension Scheme”.
Sources said the future of the final- salary scheme would depend on how it performed.
Roy Rickhuss, national officer for steel at the Community trade union, said members of the nursery scheme would become eligible for the more generous pension if it has a funding level of at least 104%, or more assets than liabilities.
In March 2011, the scheme was valued at £11.4 billion. But, like many other former nationalised industries, the British Steel pension fund is paying out millions in benefits each year to 155,000 members, while only 18,500 workers are currently contributing to the fund.
This gave the scheme a funding level of 97% last year. The latest triennial valuation will be revealed within the next few months.
Rickhuss rejected suggestions that the nursery plan heralded the inevitable closure of the final-salary scheme.
“We would not have entered discussions on that basis. In our view it was a fairly good, sensible compromise,” he insisted.
... of course energy pricing in the UK must be impacting TATA as it impacts the little people of Britain, but more of that later !
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