British Steel rescue deal gives workers ‘pension certainty’

Claire Tyrrell reports

A lifeline for British Steel in the form of a Chinese buyout would have positive implications for its workers caught up in its defined benefit (DB) pension scheme transfer saga.

News this morning that Chinese steel producer Jingye Group has agreed in principle to purchase British Steel the Scunthorpe-headquartered business for £70m has been welcomed by its employees.

The potential buyout, rumoured to be confirmed later today, could reportedly save 4,000 UK jobs.

Echelon Wealthcare Principal Al Rush, instrumental in a pro-bono initiative to help steelworkers poorly advised on defined benefit (DB) transfers, said the Scunthorpe workers he spoke to were “overwhelmingly keen and enthusiastic” about the impending deal.

“I think it works out well for a number of reasons. Firstly, all those guys in the Legal & General (L&G) defined contribution scheme have now got certainty that their pension contributions are going to continue,” he said.

“I also think they’ll be happy because the potential Chinese buyer has said that they’ve got to save costs … and it could be the case of the new owner brings back job sharing, which is something that a lot of them really want to do.

“When I spoke to guys about it, they were overwhelmingly keen and enthusiastic.”

Rush said the continuation of the L&G scheme was the “icing on the cake” for its workers, some of which had paid up to £22,000 into it.

British Steel went into liquidation in May and has been kept afloat by the government’s Official Receiver since then.

Revelations of poor financial advice relating to transfers out of the British Steel Pension Scheme have been coming to light over the past several months.

Thousands of workers have lost significant sums of money after leaving the scheme. Advice firms linked to the scandal have also shut down as a result.