Tata Steel workers today began voting on a plan, that includes 1 billion pound investment over 10 years, to rescue the Indian conglomerate's UK operations, with a result of the ballot expected by mid-February.
Steelworkers' unions and officials have agreed to endorse Tata Steel's proposal involving a 1-billion-pound investment plan over 10 years in an effort to save thousands of jobs across the company's UK operations, which includes the Britain's largest steelworks at Port Talbot in Wales.
The plans are dependent on the current British Steel Pension Scheme (BSPS) being spun off into a separate entity to overcome its 15-billion-pound liability.
The three main workers unions Unite, GMB and Community which have come together as the National Trade Union Steel Coordinating Committee (NTUSCC), had issued a joint statement describing the proposal as the "best outcome".
"We fully understand the concerns of members, particularly around the BSPS. But as we have said before, what you are voting on is the best outcome that could be achieved through negotiation," the statement said.
"It is our collective view, supported by our independent experts, that this is the only credible and viable way to secure the future.
Although this is a situation that we would never have wished for, it is also the only way to protect the benefits you have already accrued and to provide a chance to prevent the BSPS free-falling into the Pension Protection Fund," it adds.
Under the new proposals, Tata Steel intends to close the BSPS to future accrual on March 31 and introduce a defined contribution pension scheme with maximum employer contributions of 10 per cent, based on employee contributions of 6 per cent.
The BSPS is one of Britain's largest pension schemes, with 130,000 members and Tata Steel had inherited the scheme when it bought Corus in 2007.
It has proved the biggest stumbling block in arriving at a deal to secure the future of Tata Steel's operations in the UK.
The Tata group has been in talks with German major ThyssenKrupp for a potential merger, which is also predicated on a solution to the pension scheme.
"Tata needs to separate its pension liabilities from the plants in Ijmuiden and Port Talbot, then we can talk," ThyssenKrupp CEO Heinrich Hiesinger had said last week.
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