The Pensions Regulator has agreed terms with Tata Steel UK (TSUK) to facilitate the separation of the British Steel Pension Scheme (BSPS) from TSUK by means of a regulated apportionment arrangement (RAA). Following completion of the RAA, members will have the option to either transfer to a new TSUK sponsored scheme, or remain in the BSPS which will then transfer to the PPF.
The terms agreed as part of the deal to separate TSUK from the BSPS include:
- A £550m injection into the BSPS by Tata Steel Group
- A 33% stake in TSUK for the BSPS
- A choice for BSPS members to transfer to a new scheme sponsored by TSUK
Formal approval is expected to be granted by the Regulator in 28 days following the initial agreement announced on 11 August. The BSPS trustees are expected to commence a formal communication exercise with members during the next few weeks.
The Regulator has said that the RAA will bring greater certainty for around 130,000 scheme members and will minimise the impact on the PPF.
RAAs are rarely granted by the Regulator but it is understood that, in this case, the RAA is viewed as the best outcome of a very difficult situation.