Tata Steel reaches agreement with trade unions for closure of UK pension scheme

Koushik Chatterjee, Group Executive Director Tata Steel and Executive Director for its European business said: “The delivery of Tata Steel UK’s transformation plan and generation of free cash flows will be the key enabler for the future sustainability of the business and we are very encouraged by the early signs of the delivery of the plan."

The proposal on pensions and other changes in the employment terms are part of the ongoing transformation plan that the business is undertaking. Photo: Reuters

Tata Steel UK on Thursday reached an agreement with trade unions on a number of proposals which also involved closure of its British Steel Pension Scheme.

Koushik Chatterjee, Group Executive Director Tata Steel and Executive Director for its European business said: “The delivery of Tata Steel UK’s transformation plan and generation of free cash flows will be the key enabler for the future sustainability of the business and we are very encouraged by the early signs of the delivery of the plan."

The company said that it will start consultation paper with its employees by next week on the above proposal. "Employees would be offered a competitive defined contribution scheme," it said.

Tata Steel said, "The proposal on pensions and other changes in the employment terms are part of the ongoing transformation plan that the business is undertaking. As part of today’s agreement all parties will work towards making Tata Steel UK a sustainable business."

The company has also offered an employment pact until 2021 which supports employees through future changes by investing in their skills to support further plant upgrades, automation and other digital initiatives

Chatterjee said, "The proposed changes to future pension provision and other employment terms are necessary to de-risk the company and help achieve long-term sustainability. We are also working separately on a necessary structural solution for the British Steel Pension Scheme fund."

Shares of Tata Steel was trading at Rs 424.80 per share on BSE, up by Rs 12.30 or 2.98%.