Tag Archives: Pension

BSPS2


So the days of the old BSPS are numbered. At some point in the next few months it will be absorbed by the Pension Protection Fund (PPF). In the meantime a second incarnation of the British Steel Pension Scheme, with less generous CPI-based annual increments, is being proposed, and the personal papers have been sent out to all existing members.

There are also public meetings planned. Although already started in the north, South Wales will have to wait till the middle of November for them to take place. I have booked mine for Port Talbot on the 15th of November. Although to be fair, in my case the choice is a no-brainier: if I follow the BSPS into the PPF, I immediately take a 10% cut in my pension, something that never will be recovered by future pay increases.

People who haven’t retired yet have a third option, which is to take their money out of either scheme and try their luck in investing it in a form of defined contribution scheme. Fortunately that’s not an option for me. I say fortunately, because if this goes wrong it could become the next financial miss-selling scandal. At least in my case it doesn’t come as a total shock, unlike some people who retired ages ago, and had thought themselves set up for the rest of their days.

Especially since pensions earned prior to 1997 are not index-linked at all. Although I’m partly affected there (my first year at British Steel together with my Allied Steel & Wire transferred Pension), at least it’s not the total disaster it is for people who have all or most of their service in that period.

So where does this leave me? Not over the moon, but also with the thought that it could have been so much worse. By the time inflation starts to erode my current pension, maybe the state pension can come to the rescue.

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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.

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.