Tata Steel pension scheme edges towards safety

Tata Steel is one step closer to saving its £15bn retirement scheme from falling into the government's pension lifeboat.

A statement from the British Steel Pension Scheme trustees revealed Tata Steel had initiated talks with both scheme trustees and "relevant regulatory bodies".

Tata Steel, the UK's largest steelmaker, said in December it had reached an agreement with trade unions on a shake-up to the firm's pension scheme.

The firm is eager to close the scheme going forward and separate it from the business. The trustees would then run the scheme with a pool of assets sufficient to meet members' liabilities.

German industrial group Thyssenkrupp is currently in talks with Tata Steel to buy the firm's European assets – it is a deal that will only will only go ahead if the pension changes can be driven through.

Under current proposals, Tata also wants to cut pension members' benefits, but keep them at a higher level compared with what could be expected if the scheme fell into the government's pension lifeboat, the Pensions Protection Scheme.

The trustees wrote in a statement:

Tata Steel has indicated that it believes the ability to achieve a sustainable future for the UK business is dependent on the structural de-risking and de-linking of British Steel Pension Scheme from the business.

Tata Steel is now in discussions with the Trustee and the relevant regulatory bodies on how this might be achieved.