Tata Steel employees have voted in favour of industrial action over the closure of its defined benefit (DB) pension scheme to future accrual.
The official ballot took place on 6 May and closed on 29 May.
As of December 2014, the British Steel Pension Scheme (BSPS) had 143,000 members, with 17,004 making up employee members and 91,264 making up pensioner members.
In November 2014, the assets of the scheme were valued at around £13.6 billion and continue to increase.
Dave Hulse, national officer at union GMB said: “GMB members have sent a clear message to the organisation that they will not sit back and let them take away their hard earned pensions.
“Tata Steel need to take the threat away of closing the final salary scheme and comeback around the table to have meaningful negotiations before this is taken out of their hands. Our members will take whatever action is needed to keep the scheme open.”
Hugh Nolan, chief actuary at JLT Employee Benefits, added: “While it is a sad day whenever yet another final salary pension scheme bites the dust, the Tata Steel employees are fighting against an inexorable trend, as the number of private sector employees in such schemes almost halving from 3 million in 2006 to only 1.6 million in 2013, and still falling.
“The average final salary pension scheme costs over 20% of salary for each member, has a substantial historic deficit to fund (£2 billion for Tata Steel) and this deficit could possibly get worse. This hampers any efforts for Tata to sell parts of the business.
“If Tata Steel hold firm, their employees may eventually need to accept the closure and try to get the best contribution rate to their new defined dontribution (DC) scheme. DC schemes are extremely flexible these days and can even be better than a final salary scheme, as long as the right level of contributions goes in from employers and employees, bearing in mind that the average combined rate of 9.1% is less than half of the average final salary scheme level.”
