GMB members in Tata Steel have voted for industrial action over the closure of the British Steel Pension Scheme.
Members have sent ‘a clear message to the company that they will not sit back and let them take away their hard earned pensions’, the union says.
Tata employs 2,050 people in South Yorkshire at sites in Rotherham and Stocksbridge.
As of December 2014, the British Steel Pension Scheme had 143,000 members, with 17,004 employee members and 91,264 pensioner members.
The assets were valued at £13.6 billion in November.
Dave Hulse, GMB national officer, said: “Members have sent a clear message to the company that they will not sit back and let them take away their hard earned pensions.
“The company 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.
“We have lost faith in the company and its leadership and believe the company are putting the business at serious risk. They now have an opportunity of putting things right by sitting down with the steel committee and having meaningful discussions that is acceptable to all.”
CEO of Tata Steel’s European operations, Karl Koehler, has written a letter to UK employees. ‘to make one thing absolutely clear’.
He wrote: ‘Our actions have been aimed at developing an affordable and sustainable pension scheme through changes that are fair and balanced for all those who work for us – from the younger generation to our longer serving team members who have given most of their lives to the UK steel industry.
‘The past few years have seen the UK – and most of the world – go through the worst financial crisis for generations. One of the consequences has been record low interest rates. And like savings in the bank, our pension scheme’s assets have not been growing fast enough to keep up with increases in the expected cost of providing benefits. The result has been a huge shortfall of up to £2 billion which is clearly not sustainable.
‘We as a business, like many others, are faced with some difficult choices.
‘In recent years, we have had to tighten our belts in order to protect the future of our company and the valued and skilled people who work for it. We are still facing very difficult business conditions in the UK.
‘Indeed, our UK operations as a whole are still losing money and we will need further significant investments from Tata Steel if we are to build a sustainable business here. The changes we’ve proposed to our UK pension scheme will help protect the benefits colleagues have already earned. They will also, crucially, ensure a good pension for our people in the future which is both affordable and sustainable.
‘Of course we looked at keeping the final salary scheme running, a scheme which by today’s standards is a very generous package. Indeed we initially proposed reasonable measures to the unions that would have addressed the huge shortfall while also being fair and balanced to all colleagues across the age range. Sadly this was rejected by the trade unions.
‘The unions continue to insist on keeping unaffordable early retirement enhancements in the pension scheme which would favour our older colleagues - but would be to the detriment of younger members of the team. I believe the unions’ proposals would be unfair and unbalanced.
‘Because of this, we have been unable to agree on a way forward. But we have always said we are open to talks and further negotiations with the unions and that continues to be the case.
‘I hope that everyone agrees with one thing: that we have to change the pension scheme in order to deal with a shortfall as high as £2 billion which is not sustainable and which would damage the long-term prospects of our company in the UK.
‘I understand and recognise colleagues’ frustrations at this situation. But I would ask them not to support industrial action to retain unaffordable early retirement benefits. Ultimately, such action would be self-defeating and would jeopardise our efforts to build a sustainable business in the UK.’