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Workers strike over move to axe DB scheme

Steelworkers at a company owned by a Labour peer will strike for a second time this week in protest at proposals to scrap their final-salary pension scheme.

Workers at Caparo Steel Group plants downed tools for a one-day strike last week as the flight from defined-benefit to defined-contribution schemes prompted the UK&#39s first pension strike.

Caparo, owned by Labour peer Lord Paul, has gone back to members of the ISTC union with an offer of a cheaper version of its final-salary scheme on the basis of a benefit of 1/72nd of final salary per year of employment instead of the current 1/60th basis.

The company says the FRS17 accounting standard, poor equity markets and low annuity rates have forced it to cut pension costs to preserve its financial health.

ISTC spokesman Ken Penton says: “Members feel strongly about the cut to their pension. The wages at this company are not great and the one reason for staying was the quality of the final-salary scheme.”

Caparo director Angad Paul says: “Nobody imagined when the final-salary scheme was created that it would generate liabilities that are unlimited and unquantifiable. This is an emotional issue but if we do not do something, the company could go the way of competitors who ended up bankrupt.”

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