Tag Archives: Pension

Coda


This is the last regular post I intend to make on this blog – from time to time there may be the occasional addition, but from now on they will be the exception rather than the rule.

The reason ? I think I’ve more or less exhausted the major stories from my career in steel between the days I started my studies in 1973 and the day I retired in march 2016. No point in mulling over stale topics, and I thought that the first anniversary of my retirement might be a good point in time to stop.

In a way, retirement has been as expected, although the possibility of coming back on a part-time basis to help out did not materialise. As far as the business and the pension scheme is concerned, things are still up in the air. Even though the financial situation of both has improved, neither can claim to be futureproofed to any major extent.

Granted that Tata had their wish in getting the defined benefits scheme shut (I haven’t heard of any date when this closure will happen), and that as a result Port Talbot’s blast furnaces were given a five year lifeline, but to be honest that’s not exactly a secure long-term future. As for the pension scheme, Tata’s ultimate goal to completely divorce itself from the British Steel Pension Scheme is only partially achieved with the closure of the defined benefits scheme, and the possibility of the Pension Protection Scheme still hangs over the proceedings.

The potential merger with Thyssen-Krupp appears to have faded away. One of the possible reasons being, ironically enough, the fact that Thyssen-Krupp’s pension is only kept afloat by the good financial results of its parent company. Would Tata really want to ditch one pension scheme only to lumber itself with another one with equal potential for economic damage ?

Whatever the case, the year since my retirement must have been filled with insecurity for all parties involved. To be honest, even I feel that I would want things to be put to bed as far as the pension arrangements are concerned. The British Steel Pension Scheme has not given any further updates since last January, probably meaning that there’s no clear way forward yet.

Until that happens, I won’t have properly retired.

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Mr. Price, Again


May ‘must be tough’ with Tata

(from the Sunday Times of 29 January 2017)

A Welsh assembly member has condemned Westminster’s lack of action to save the steel industry and has called on the prime minister Theresa May to take a leaf out of President Trump’s book and fight to protect British jobs.
Adam Price, a Plaid Cymru member for Carmarthen East and Dinefwr, writes in the Sunday Times that the US president “personally strong-arms any company threatening American jobs”.
In December, the Welsh government confirmed that it would invest £8m to keep Tata Steel in South Wales, where the company employs almost 7,000 people, including more than 4,000 in Port Talbot.
However, according to Price, the British government is doing very little. His plea comes on the eve of steel workers voting on a package of proposals that would mean cutting pension benefits to keep the plants open.
“[It] has been presented in the starkest terms, as a choice between their job or their pension,” he adds.

That would be because the choice is that stark, Mr. Price. You can’t deny that Tata have bent over backwards not to be brutal, even though they’re in a situation where it’s impossible to please everybody all of the time.

And now you want to give them a good reason to walk away and wash their hands of the whole mess, like they nearly did last year ? You appear to forget that Donald Trump is lecturing US companies to bring their business back home – he has a far greater bat to swing and the clout he has over local companies can’t be compared with the influence the UK government has over an Indian company with a British subsidiary.

Clearly some people don’t get the message when the unions tell them to keep their noses out, because they don’t know what they’re talking about.

Michael Sheen: The Fight for My Steel Town


Just earlier today I watched “Michael Sheen: The Fight for My Steel Town” (originally broadcast on 8 June 2016) on BBC iPlayer. I know, a bit late, but still good to see the period stretching from my last few months in Port Talbot until my first few months of retirement, and see how other people lived through the same period.

Since my decision had already been made a year before, I did not endure the same agony as some of the people in the documentary, but still my heart bleeds to see the upset caused by the rollercoaster ride of early 2016. It makes me realise how lucky I was to be able to jump ship on a full pension aged 60. Had I been born half a year later, things might have turned completely different, and I might not have been sitting here contemplating how things might have been. I would have been in the thick of it, and probably feeling trapped.

A pity that there appears to be no sequel planned – I would have been curious how the last six months looked like by the people that still hope to sit the storm out. But then again, that’s the media for you: as long as there’s the threat of redundancies, strikes or closures, the cameras are in place to record what happens. As soon as the initial panic is over, the world forgets about you, even though for those trapped, the problem of uncertainty hasn’t gone away.

The Advice from Mr.Price


Just read the most recent venture of a politician into steel land on the BBC website :

Plaid AM urges Tata workers to reject ‘unacceptable’ pension deal

This according to Adam Price, Plaid Cymru’s AM for Carmarthen East and Dinefwr. And what is his reasoning ? All of a sudden “The economic climate that the steel industry faces in 2017 has been radically transformed. The medium-term outlook has improved and profitability has returned to Port Talbot.” Really ? Honestly ?

True that Port Talbot is no longer making horrendous and unsustainable losses, and now makes a modest profit on the back of the weak pound and a slight upturn in the steel prices in Europe. But that’s still a long way from proclaiming that the business is now healthy and can withstand anything the markets and industrial disputes can throw at it.

Also remember that the parent company has stated that any future investment will depend on the South Wales business not just returning a few measly million pounds in profit, but something in the order of 100 million or preferably more. In short, they’re looking for signs that this part of the business will not slip in a few years time and start haemorrhaging money again.

And let’s also remember why Tata Steel put us up for sale in April 2016 : not only was it the horrendous losses, but also the mill stone of the defined benefits pension scheme. Whereas one of the two is already hard to bear on an indefinite basis, the combination of the two is sufficient to put off potential mergers with the likes of Thyssen Krupp, who probably have seen how BMW divested itself from Rover in just such a situation.

Even with the improved financial situation Port Talbot remains a poisoned chalice as long as the current pension scheme with its potentially unlimited liabilities remains in place. And no talk of nationalisation and restarting the original selling process changes this. After all, do you really think that new owners will want to carry the burden of the current pension scheme ?

So if we followed Mr. Price’s advice that “If Tata is not prepared to do this, the company should be nationalised on a temporary basis and talks reopened with those firms that have been waiting in the wings to buy it”, what do you think the outcome would be ? You still will have lost your defined benefits scheme, but now your parent company is far smaller and financially less capable to take the blows as Tata have been doing for the last 5 years. Do you really feel confident that this saga would even last the minimum guarantee of five years given by Tata Steel ?

And if Mr. Price’s advice turns out to be bad advice, who do you think will have sleepless nights because they don’t know where the next mortgage payment will come from ? I doubt whether it will be Adam Price AM.

Cut Your Losses


Just when you thought your job was safe in Port Talbot, the following BBC news item comes along :

Struggle over Tata Steel pensions argument

My heart bleeds for those who feel themselves trapped between a rock and a hard place, and I would feel less than happy if I saw my defined benefits scheme wound up and replaced by a defined contribution scheme. But is there really much of a choice ? Would you be any better off if the plant was shut or sold off ?

I know this probably makes those in that unfortunate position feel trapped, and bitter that the company takes advantage of their unenviable dilemma. However, if the alternative is the worse of two evils, is it time to give in and cut your losses ?

I also know that I’m one of the lucky ones since I managed to activate the escape hatch when the end of the defined benefits scheme was first brought up in April 2015. Since then, however, things have gone from bad to worse quite fast, and even with the improvement of the last few months there surely can’t be much appetite for renewed industrial action ? It would be akin to torpedoing any chance of a future for the plant.