Lessons "can and will be" learnt from the British Steel Pension Scheme events, the government has said, but stands by the outcome involving a regulated apportionment arrangement and new pension scheme.
The government has responded to a consultation that was run "to explore what might be done to help the British Steel Pension Scheme (BSPS) in the wider context of efforts to protect the UK steel industry" in May 2016. It received more than 5,000 responses.
The consultation asked for views on four options:
• Option one: Use existing regulatory mechanisms to separate BSPS from the sponsoring employers (Tata Steel UK Limited and other associated companies).
• Option two: Payment of pension debts – the existing sponsoring employer ‘buys-out’ of the scheme.
• Option three: Reduction of the scheme’s liabilities through new legislation that would allow the trustees to reduce the indexation and revaluation on future payment of accrued pension rights.
• Option four: Legislating to permit a bulk transfer without member consent to a new scheme that would offer lower indexation and revaluation but pay benefits equal to or greater than the compensation paid by the Pension Protection Fund.
The government said the separation of the BSPS from employers through an RAA and Tata Steel UK's agreement to sponsor a new scheme was "a very positive outcome" considering the circumstances.
"As a result, we have concluded that it is not necessary or appropriate to bring forward new legislation either to permit the trustee to reduce the pension scheme’s liabilities by reducing future increases... or to allow the transfer of members to a new scheme paying lower benefits without individual member consent," the government added.
"While Tata Steel UK Limited and the BSPS were arguably an exceptional case, lessons can and will be learned to the benefit of other employers, schemes and their members."
