Tata Steel Working On Solution To Improve Deficits In Pension Scheme
Last Wednesday, Tata Steel confirmed it is at work with its solution for pensions deficits. Its British Steel Pension Scheme is billions deep in debt to employees. Striking deals with unions to close the scheme to future deficits, the steel manufacturing plant guaranteed investments and jobs as it continues to keep production going in Port Talbot in Wales.
Tata Steel’s plans include replacing the defined benefit scheme for future employees with a defined contribution scheme. Tata Steel Group Executive Director and Executive Director for its European businesses Koushik Chatterjee said they are proposing the changes to “de-risk the company and help achieve long-term sustainability.”
Throughout the United Kingdom, pension bills have risen with no end in sight. Pension deficits are now at £414bn with UK companies depending heavily on bond interest rate increases to decrease the amount. Analysts said the current deficit amount is lower by almost £100bn but it still is far off from the lowest deficit record in 2015 at £265bn.
The Work and Pensions Select Committee had launched a formal consultation into self-employed workers’ benefits and letting workers choose their own state pension age. The new measures may prove effective by helping them boost their retirement funds with a government bonus.