After meeting certain qualifying conditions, the new British Steel Pension Scheme (BSPS) will continue as planned.
The new fund, backed by Tata Steel UK, a division of India’s Tata Steel, has met the minimum size and initial funding test level, which will allow for a merger with Germany’s Thyssenkrupp.
According to Allan Johnston, the new BSPS trustee chairman, the plans will move forward on March 28, with the BSPS closing to future accrual on March 31.
“This is very good news for the 83,000 members who wanted to receive their benefits from the New Scheme and chose to switch to it,” Johnston said in a statement.
Last year, the British pensions regulator approved a deal where a one-time £550 million ($768.6 million) payment to the BSPS would allow for Tata Steel UK to cut pension benefits and create a new BSPS.
Reportedly some 25,000 scheme members declined to opt into the new BSPS, leaving them in the care of the Pension Protection Fund, which could potentially reduce their pension transfer value.
Following the 2017 pension predicament, Thussenkrupp and Tata announced a deal to merge their European steel operations, which is expected to close later this year. Should the agreement go through, the merger will create Europe’s second-largest steelmaker.