12 Dec Anne-Marie Winton comments in Pensions Expert on the British Steel Pension Scheme
The £15bn British Steel Pension Scheme (BSPS) has been at the centre of an intense debate over the past year around giving struggling sponsors the ability to restructure accrued benefits.
Tata UK Steel is currently in discussion with employees about closing the BSPS to future accrual. The DB scheme could be replaced by a “competitive” DC scheme, offering combined contributions of up to 16 per cent. This comes after talks with trade unions on measures that can be implemented in attempt to preserve the UK steelworks.
Partner Anne-Marie Winton commented that compromise would likely involve the granting of a regulated apportionment arrangement (RAA) by the Pension Protection Fund and the Pensions Regulator, as “there are very few ways of delinking a pension scheme from the employer”.
On whether greater clarity is needed on how distressed the sponsoring employer should be in order for a RAA to be granted, Anne-Marie noted that a strict test already exists: “[Insolvency] has to be inevitable within 12 months. There has to be a burning platform.”
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