On 11 August 2017, the Trustee of the British Steel Pension Scheme (BSPS) announced that terms had been agreed for a Regulated Apportionment Arrangement (RAA) to separate the BSPS from Tata Steel.
The separation was completed today, after the Pensions Regulator issued its formal approval notice for the RAA. As part of the separation, the BSPS has received £550 million from Tata Steel together with a 33% equity stake in Tata Steel UK Limited.
BSPS members now have two options: to switch to a new scheme (the New BSPS) providing the same benefits as BSPS but with lower future increases, or to remain with the current BSPS and move into the Pension Protection Fund (PPF). The benefits offered by New BSPS are expected to be better than PPF compensation for the vast majority of current pensioners and for many other members. The New BSPS will go ahead only if certain qualifying conditions are met.
All 130,000 Members have already received the first in a series of newsletters outlining the proposals for separating BSPS from Tata Steel and the timetable for the consultation. Members will receive personal information and illustrations by October 2017 to assist members in making their choice.
Members will also be invited to attend meetings at locations across the country where there will be the opportunity to discuss the options in more detail with a panel, including Scheme representatives, and have their questions answered.
A dedicated website (www.bspensionschoose.com) is also now available where members can find information and see the answers to questions that other members are asking.
Guidance will also be provided by a free and impartial telephone helpline. Members will have until December 2017 to choose whether their pension goes into the Pension Protection Fund, or whether they join a new British Steel Pension Scheme.
The BSPS Trustee Chairman, Mr Allan Johnston commented:
“The BSPS Trustees can confirm that the RAA has taken effect today. Members of the BSPS now have an important decision to make regarding their pensions and we are undertaking a series of communications to ensure that they have all the information they need to make the right choice for them.
"For most members, the choice will be straightforward. For some members, however, the best choice will depend on their personal circumstances and preferences. It is very important that members make an informed decision after receiving full information about all their options and taking appropriate advice.
"The Trustee expects that the transfer to the new scheme will be completed by March 2018 and that the original, old BSPS will go into a PPF assessment period by the end of that month.”