Tata Steel UK said it will close the British Steel Pension Scheme to future accrual from March 31 and employees will get a new contributory scheme for their retirement savings thereafter.
The Tata Steel arm said that it has completed the consultation process with employees to close the British Steel Pension Scheme to future accrual.
"From 1 April 2017, employees will save for their retirement through a new and competitive defined contribution pension scheme," Tata Steel said in a filing to BSE.
"After carefully considering all the responses received and sharing the review with the trade unions, Tata Steel UK has informed employees it will close the British Steel Pension Scheme to future accrual with effect from 31 March 2017," Tata Steel said.
Tata Steel UK continues to be deeply engaged with the pension scheme trustee, the trade unions and relevant regulatory and government bodies to identify the best prospects for the future sustainability of its UK operations and a fair and practical outcome for the members of the Birtish Steel Pension Scheme, it said.
The company believes that finding a structural solution to address the risks from the pension scheme to the viability of the business is a crucial part of its ongoing UK transformation plan, it said.
Earlier, UK Steel workers' unions had given their backing to Indian conglomerate Tata Steel UK's pension plan in a bid to rescue thousands of jobs and allow a merger with German major ThyssenKrupp to go ahead.
Nearly 10,000 workers voted in a ballot in favour of moving from a final salary pension to a less generous scheme in return for job safety and Tata's promise of nearly 1-billion-pound worth of investment over the next 10 years.
Tata Steel yesterday said that it was in "constructive discussions" with Thyssenkrupp over potential merger of its European business with the German conglomerate.
Tata Steel, which owns the UK's largest steelworks at Port Talbot in South Wales among other units, has been working on finding a solution to the crisis in the steel industry since it announced a major restructuring in March 2016.
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