London: The UK's largest trade union Unite Wednesday announced holding a ballot for industrial action over Tata Steel's proposal to close the British Steel Pension Scheme (BSPS), even as the firm said it has "initiated action on de-risking its exposure to the scheme."
"Unite will ballot its 6,000 members at Tata Steel UK for industrial action over its proposal to close the BSPS," the union said in a statement on its website.
Unite claims to be UK's biggest trade union with 1.42 million members in every type of workplace.
"Unite's ballot for strike action and industrial action short of a strike will open on Tuesday May 26 and close on June 5. Steel unions Community, GMB and Ucatt have already opened their Tata Steel ballots which will close on May 29," it said.
On the pension issue, Tata Steel Group Executive Director (Finance and Corporate) Koushik Chatterjee said in a earnings release: "The Company also continues to pursue its strategy of exiting non-core assets and has initiated action on de-risking its exposure to the UK Pension scheme that would help the long term sustenance of the UK business amidst difficult business environment."
Explaining the issue at Tata Steel, Unite said presently workers can retire at 60 years without an actuarial reduction.
"The company's view is that they should now work until the age of 65 for a full pension. If they were to retire at age 60 then, they would lose five percent for each year of early retirement - 25 percent in total," the union said.
Unite's members in Tata Steel include crane drivers, erectors, fitters, riggers, turners and welders. The main sites are at Corby, Llanwern, Port Talbot, Scunthorpe, Shotton and Workington in the UK.
Unite's National Officer for steel Paul Reuter said: "Following five months of intensive negotiations where the trade unions offered savings to the company of GBP 850 million, Tata Steel UK has decided that it is ideologically wrong for employees, who have worked hard in an extremely strenuous and physically demanding environment, to be able to retire with the pensions that they were originally promised."
Tata Steel UK is consulting members on its proposal to close the pension scheme and to financially penalise workers and their families in retirement, he added.
"Our members have made it clear that the proposed changes are totally unacceptable.
"Unless Tata Steel UK enters into further meaningful negotiations that would preserve the pension scheme, then the first national industrial action in the industry for 30 years would seem inevitable," Reuter said.
The industrial action ballot is sought by unions to decide between a strike, lock-out and action short of a strike based on the majority view of an estimated 17,000 employees.
Separately in a result's presentation, Tata Steel said it is consulting with UK employees for "sustainable pension arrangements."
The firm said that long term challenges faced by the BSPS, UK scheme are "high number of pensioners as compared to active employees" and "low bond yields especially in comparison to the relatively high inflation rates."
The company is also pursuing derisking options to ensure a sustainable arrangement, it added.
"Periodically, a triennial valuation is carried out in consultation with the scheme trustees and trade unions, The valuation as of March 31, 2014 is currently ongoing," Tata Steel said.
The firm added it is in discussions with UK unions since late 2014 with the aim of creating more sustainable pension arrangements for UK employees by reducing benefits and liabilities.
It said: "Agreement could not be reached with the unions prompting start of consultation process."
UK unions are balloting members for industrial action on pension issue and the ballot expected to close end May, it added.
"Tata Steel remains open to unconditional talks with the unions to find resolutions to the challenges facing the pension scheme," the firm said.
