After Greybull deal, workers get new pension plan: Union Leader

The transfer means that the Scunthrope steelworks, two mills in Teesisde and a workshop in Workington, and a design facility in York will now be called British Steel. Below is the verbatim transcript of Roy Rickhuss’s interview with CNBC-TV18's Kritika Saxena. Q: You were at that hand over. What is the sense that you have gotten from both the management in assuring that employees of the Scunthorpe business, 4,000 employees will be taken care of and that the handover of the business will be smooth? A: Oh, yes the handover took place today. So, officially the long products division is now owned by Greybull and named British Steel and this was a plan which was formed by the unions and the management before the handover is the plan that they will follow and it has already started to achieve its targets. Q: With respect to the pension liability I believe there have been multiple discussions between the unions and the UK government as well as Tata Steel. Specific to the Scunthorpe plant what is the revised pension plan that you are working with and what happens to the current pension plan. I believe that will be borne by Tata Steel management? A: First of all it is a different situation to the rest of the Tata business that is currently out for sale because in the UK with the final salary pension scheme if you are not an employee of the company then you can't be a member of the pension scheme.

So, when Tata decided to sell the long products division then all of the workers within long products would become deferred members of the Tata Pension Scheme and they would have to join a new pension scheme, which was negotiated between what is now British Steel and the unions. So, they have now joined the new pension scheme.

Q: So the erstwhile pension liability or the pension surplus will be borne by Tata Steel, correct? A: The remainder of the workforce in the UK, our steel products in Port Talbot and Labour Plant they are still members of the pension scheme. The pension scheme there continues. Obviously with the less people with the less active members, but the pension scheme remains in place, at the moment pension scheme continues, however, we do know, But Tata have said that a number of bidders for the rest of the business do not wish to take on the pension liability and there are negotiations now taking place between Tata, the pension scheme trustees and the government to try and find solution to the pension scheme issue. Q: You have been directly in touch with the UK government as well as Tata Steel including prospective buyers as well on the entire issue. What is the timeline and what is the sense that you have with respect to when the sale of the entire business is likely to take place? A: We don’t know the exact time because it does take time, it is a process. We thank Tata and we do accept that Tata behave very responsibly with the long products division, they allowed enough time for the successful sale which we seen completed today, but it does take time and Tata need to support the businesses to that process. Now my understanding was last week at the board meeting they are working at the number of bids and they were going to shorten the shortlist the bid down. They haven’t come back yet, but my understanding is that they are still looking at the bids and there has been some more points of clarity or questions that have been asked, but hopefully by the end of this week or very soon, we will get the announcement from Tata in terms of which of the bids they have shortlisted to take to the next phase or to the next stage, but we need Tata to continue to behave in the same way as they have so far which has been in a responsible way. Q: With respect to the pension liability as you said buyers are not willing to take on the pension liability completely. Has there been an assurance given to the union by the UK government and by Tata Steel that it will be borne by them separately or equally? A: No, no in that sense. We know that the number of options and number of solutions and they are working on. Q: So what are these options? A: One of the option is that we have in the UK something known as Pension Protection Fund where pension is supported – it goes into the pension protection fund, so then there is only guarantee for the workers of a certain percentage of their pension and not of all their pension is protected. Now the unions do not believe that this is a good option, we want to avoid that option. We have said that we would not want to see the scheme going to the pension protection fund because it would reduce the benefits of all our members and pensioners, so we are working on a solution that keeps it out of the pension protection fund.