Keeping the Pension Scheme Open
Corus is one of the last major private companies to retain a pay-related final salary scheme open to new members. The British Steel Pension Scheme (BSPS) is a most attractive element in the Corus offer to employees and Community safeguarded it in the face of determined challenges.
Community led for the unions in negotiations with Corus which arrived at a package of measures – including a commitment by the company to pay in at least double employees’ contributions – to keep the Scheme sustainable and attractive in the face of growing costs due to increasing life expectancy and uncertainty arising from sharply fluctuating stock values.
The Scheme is in good shape now but Corus has been taken over by Tata Steel and is renewing efforts to deny new employees the chance to join it. Nearly always, a scheme’s closure to new members has been the beginning of the end of the pay-related pension scheme for all employees. The Tata Steel sister company which bought Tetley Tea closed its final salary scheme to new entrants before replacing it after a few years with a money purchase scheme. Community are concerned this is the Tata Steel plan for the BSPS. Corus also wants to reduce the number of union appointed trustees in the board of the Scheme. It is attempting to disregard the union agreement with British Steel which have seen trade union nominees serve on the British Steel Pension Schemes board.
This has given employees a voice on their financial position and Community is proud to report that their work has strengthened the position of the Pension Scheme. Community armed itself with professional pensions expertise in the negotiations and is ready and able to stop Corus from closing the Scheme to new members and from breaking the agreement about the union presence on the Board of Trustees.
Community negotiated these arrangements less than two years ago with Corus to protect members and their families by providing for the pension scheme to be able to cope with new conditions and new threats. Closing the BSPS to new members would be the beginning of the end for the Scheme. So Community will fight to keep the BSPS open to new members; it will fight to hold Corus to its agreement about the appointment of trustees from the unions to safeguard the Scheme.