Tata Steel’s move to amend pension scheme runs into more opposition from unions

Unite will become the fourth British union to ballot its members for industrial action over Tata Steel’s proposals to alter its longstanding pensions arrangements in the UK.

Some 6,000 members of Unite will be balloted between the May 26 and June 5, the union said in a statement on Wednesday. They include workers from across Tata Steel’s UK operations, including Port Talbot, Scunthorpe, Corby, Llanwern, Shotton, and Workington.

Three other unions – Community, GMB and UCATT – began balloting their workers at the start of May, with the ballot set to end on May 29.

In a statement, Unite national officer for steel Paul Reuter said Tata Steel UK “ideologically” opposed the existing arrangements, which enabled workers to retire at the age of 60 – rather than the UK official age of 65 – on a full pension.

Tata Steel had originally proposed to amend, but maintain the existing defined benefit pension scheme dating back to the days of British Steel, to help fill an estimated two billion pound deficit – the result of retired employees living longer and longer, and also tepid returns from financial markets.

After failing to reach an agreement on reforms, Tata Steel began consulting employees on proposals to replace the system with a defined contribution scheme that would cut the company’s costs of running the scheme, and reduce its risk exposure.

The “totally unacceptable” changes would “penalise workers and their families in retirement,” Reuters said in a statement.

“Unless Tata Steel UK enters into further meaningful negotiations that would preserve the pension scheme, then the first national industrial action in the industry for 30 years would seem inevitable.”

Under UK rules, unions must offer members the option of strike action as well as action short of strike action. The results are determined by a simple majority. Unions must give the company a week’s notice before any action can take place. In a statement, Tata Steel said it was now fully consulting with employees on proposed changes, and that the view of employees would be considered before a final decision was made.

“Tata Steel remains open to unconditional talks with the unions to find resolutions to the very substantial challenges facing the pension scheme.”

Tata Steel’s plans have been welcomed by analysts.

“Demand has collapsed, margins are wafer-thin, the Chinese are oversupplying the market so it’s a very challenging environment and Tata has been slow in taking actions to bring the company into profitability,” one Mumbai-based analyst had told BusinessLine earlier this month.

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