British Steel Pensions
The British Steel Pension Scheme (BSPS) is a significant legacy of the UK’s industrial past, providing retirement benefits to former employees of the British Steel Corporation, which was once a major player in the steel industry. This defined benefit pension scheme has been central to the financial security of its members, offering pensions calculated based on the employees’ final salary and length of service. The BSPS faced considerable challenges following the restructuring and eventual sale of Tata Steel UK’s operations. In response to funding pressures and regulatory changes, a new pension scheme was introduced in 2018, known as BSPS2, allowing members to choose between transferring to this new scheme or falling into the Pension Protection Fund. The restructuring was aimed at ensuring the sustainability of pension benefits in the face of significant industrial and economic shifts, highlighting the complex interplay between industry economics and pension security. This transition was crucial in maintaining the viability of pension promises to thousands of retired steelworkers, illustrating the adaptability required to safeguard such large-scale pension commitments.
Have you transferred out of the British Steel Pension Scheme (BSPS)?
Tata Steel UK (TSUK) has separated from the British Steel pension scheme in favour of creating a new defined benefit fund. As part of this process, members of the pension scheme had to decide if they wanted to be transferred over to the new scheme or remain in the current benefit plan instead. This would later be moved over to the pension protection fund (PPF).
It is believed that as many as 7,000 members made a request for further information relating to the transfer process, with over 700 of these requests valued at more than £200 million.
Members of the British Steel pension scheme saw financial advisors for assistance prior to the transfer of their pensions. They were charged a fee for both the transfer itself and for the ongoing advice that they received. The initial fee was around about 2% of the overall transfer value and then 1% for the ongoing advice. The average value of the funds being transferred was estimated to be £350,000.
Many members of the British Steel pension scheme were unable to state what the basis for the recommendation to transfer their pension was. It turned out the financial advisors were making the recommendation to receive their fees.
It has been estimated that only around 15% of members would have benefitted from transferring out of their defined benefit pension.
If you have transferred, then it is worth having the transaction reviewed. This is especially true if you did not fully understand what your options were and the impact that transferring would have on your plans for retirement.
Call us today to talk through what options are available to you.
Call us now for a phone or video consultation with one of our legal experts on 0800 041 8358 to find out if you are entitled to compensation, you may even be entitled to additional compensation if you have successfully claimed in the past.
