Over 25,000 members of the British Steel Pension Scheme will go into the Pension Protection Fund at the end of March as they have not returned their options form.
The ‘Time to Choose’ consultation which gave 122,000 BSPS members several choices about what do with their pensions ended this week.
The choices included staying in the original scheme known as BSPS 1 and going into the Pension Protection Fund, moving to the new scheme called BSPS 2 with better benefits or transferring out entirely.
Just under 97,000 members completed and returned their option forms, of which 86 per cent were from members choosing to switch to BSPS 2 and 14 per cent were from members choosing to move into the PPF.
However, more than 25,000 did not return their option forms, who may have wanted a different option from the PPF.
Initial estimates indicate that members transferring to BSPS 2 will represent around 80 per cent of the current scheme’s assets and liabilities.
The new scheme will only go ahead if certain qualifying conditions regarding size and funding level are met.
The minimum scale threshold has been met, but the precise funding level will not be known until mid-March this year.
The trustees say they are confident that the initial funding threshold condition will also be met.
Final figures and more detailed analysis will be made available following completion of the member allocation.
BSPS trustee chairman Allan Johnston says: “Work is now under way to allocate the members and scheme assets between the new BSPS and the old scheme. Central to this work is the requirement to ensure that, from 29 March 2018, pensioner members receive their appropriate pension payment depending on which arrangement they will be moving into.”
On 11 September 2017, the Pensions Regulator issued its approval for to separate the BSPS from parent company Tata Steel UK.
As part of the separation the BSPS has received £550m from Tata Steel together with a 33 per cent equity stake in Tata Steel UK.