Unions have expressed concerns about the future of some members of the British Steel Pension Scheme after it emerged that nearly a fifth had not responded to a consultation by the Trustee on whether to remain with the scheme, and therefore, enter Britain’s Pension Protection Fund, or move to a new scheme, including a new BSPS, being set up following an agreement struck by Tata Steel with the UK authorities.

Around 25,000 of the 122,000 members of pension scheme, which closed to new accruals in March last year, did not return their option forms, outlining whether they wished to enter the new BSPS scheme, others who requested a transfer to a new scheme, or go into the PPF, the Trustee of the scheme said this week. It said that the number included some who wanted to move to the default position of entering the PPF, as well as those who did not engage with the process.

The PPF is the UK fund that covers members of pension schemes that fall into insolvency.

The Community union criticised the government for ignoring their call that members who had not responded in time be moved automatically into the new British Steel Pension Scheme, rather than into the PPF.

“This scandalous inaction means that thousands of steel workers will now be worse off in retirement,” warned Alasdair McDiarmid of the Community Union.

The Trustee said that it appeared that enough members had agreed to switch to the new scheme for it to go-ahead.

The new BSPS being set up is dependent on reaching a certain size and funding level.

While the size criteria had been “comfortably” exceeded, the Trustee said it remained “confident” the funding level – to be known only in March – will be sufficient too.

“We are pleased to hear the results of the consultation exercise being carried out by the BSPS Trustee with scheme members,” said a Tata Steel spokesperson, who also welcomed the news that the scheme was expected to pass the agreed qualifying criteria.

“Although much work is still needed to deliver a secure future in our UK business, the progress with pensions is welcome.”

Under an agreement with the UK pension authorities struck last year, following much negotiation, and the payment of half-a-billion pounds and an equity stake, the £15-billion British Steel Pension Scheme is being separated from Tata Steel UK.

A new pension scheme is being set up which will pay modified benefits, and which Tata has said would help it towards a “sustainable and enduring future” for the company.

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