Welcome to the British Steel Pension Scheme
Welcome to the British Steel Pension Scheme (BSPS) website.
|TIME TO CHOOSE|
The British Steel Pension Scheme is changing. Information for members about what is happening next is on the time to choose site.
Please note the British Steel Pension Scheme ("the Scheme" / "BSPS") closed to future accrual from 31 March 2017.
If you remain a member of the Scheme, but not yet in receipt of a BSPS pension, then you can click Deferred Pensioners where you will be able to find information about your deferred pension.
Alternatively if you are in receipt of a Scheme pension please click Pensioners.
Different provisions may apply to benefits originally accrued under pension schemes which have been subsequently merged into the BSPS. If you are unclear about how you may be affected please contact the Pensions Office.
Information is provided for guidance only and is not legal advice.
LATEST NEWS & UPDATES
New British Steel Pension Scheme Minimum Size and Initial Funding Tests Met - 14 March 2018
Under the terms of the agreement between the trustee of the British Steel Pension Scheme and Tata Steel UK relating to the Regulated Apportionment Arrangement (RAA), the New BSPS will go ahead only if certain qualifying conditions are met. They include conditions regarding size and funding level.
The minimum size criterion has already been comfortably exceeded.
Assessments undertaken by the Scheme Actuary and agreed with Tata Steel UK indicate that the initial funding level test was also comfortably met as at 31 January 2018. The Pension Protection Fund and the Pensions Regulator have been advised of this.
The New BSPS Trustee Chairman, Allan Johnston commented:
The minimum size and initial funding tests have now been met paving the way for the New British Steel Pension Scheme to go ahead on 28 March as planned. This is very good news for the 83,000 members who wanted to receive their benefits from the New Scheme and chose to switch to it.
The Trustee expects to write to members in early April to welcome them to their new pension scheme.
Transitional CETV payment arrangements – 7 March 2018
This information is for members who wish to take a transfer from the current scheme. Please note that if you have a transfer quote and the guarantee period has expired, it is too late to request a transfer. The guarantee period will not be extended.
We have previously explained that members wishing to consider taking a transfer should request a transfer value quote not later than 11 December 2017. We have also previously explained that members deciding to take a transfer should submit all their completed paperwork by 16 February if they wanted the transfer payment to be made before 28 March (although that could not be guaranteed).
If you are considering a transfer but do not yet have a transfer value quotation, further information can be found here.
If you have already received a transfer value quotation and you wish to transfer, the position is as follows:
For members switching to the new scheme
If you submitted all necessary paperwork on or before 16 February then your transfer will be paid on the basis of the value quoted. This will be the case even if the transfer is not paid until after 28 March.
If you submit necessary paperwork after 16 February then it is most unlikely that we will be able to pay the transfer from the current scheme before 28 March. You may be able to take a transfer from the new scheme at a later date if, at that time, you are more than one year before your normal retirement age. You’d need to start the process again by requesting a new transfer value quote from the new scheme. Your transfer value in the new scheme is likely to be lower than your transfer value in the current scheme, to reflect the fact that the overall benefits, including possible future increases, could be lower in the new scheme.
For members moving into the PPF
If you submitted all necessary paperwork on or before 16 February then your application will be processed ahead of applications received after 16 February.
If you submit all necessary paperwork after 16 February but on or before 28 March you can still go ahead with a transfer, however, these requests will be processed after those received on or before 16 February.
In either case, payments made on or before 28 March will be paid on the basis of the value quoted. Thereafter, the transfer value you get might be reduced. This is because the transfer value payable in these circumstances cannot be more than the cost of providing the compensation payable to you by the PPF. At this stage the equivalent value of your PPF compensation has not been calculated and therefore we cannot say whether your transfer value would be reduced. If your transfer cannot be paid until after 28 March and would then be reduced, you will be asked first whether you still wish to proceed with the transfer.
If you don’t submit all your transfer paperwork before 29 March, then you won’t be able to transfer out and you won’t have any further opportunity to transfer out.
The Pensions Office will confirm in writing to you when we have verified the full transfer documentation for you and then again when the transfer payment has been made.
We regret that owing to the volume of transfer activity we cannot provide more regular updates.
If you have returned all completed transfer paperwork by 16th February 2018, the new scheme will be able to complete your transfer payment on the basis of your original quote, although you may have to sign an additional form to consent to this and to confirm that you still wish to proceed with the transfer.
15 February 2018
The House of Commons Work and Pensions Committee has as part of its inquiry into pension freedom and choice issued a report on the “British Steel Pension Scheme” on 15 February 2018. A copy can be accessed here.
The Trustee’s response is below:
“The Trustee of the British Steel Pension Scheme (‘BSPS’) notes the report by the Work and Pensions Select Committee and welcomes the work being done to ensure that members taking transfers from defined benefit pension schemes do so on the basis of suitable advice. The actions of some financial advisors during the Time to Choose process is something that the Committee rightly highlights as a concern for all involved.
"As noted by the Committee, taking a transfer became a statutory option for those who were still active members when the BSPS was terminated on 31 March 2017 and was already an option for other members not yet receiving a pension. When members were asked to choose between switching to the New BSPS or moving with the old BSPS into the Pension Protection Fund, many members were encouraged by IFAs and their introducers to consider taking a transfer instead. This led to a surge of requests for transfer quotes and transfer payments. The trustee continues to process requests in line with statutory requirements.
“The Committee has recognised the hard work of the Board of Trustees and the staff of the Scheme in what was one of the largest and most complex member consent exercises ever conducted in the UK.
“The Committee has nevertheless suggested that the member communication plan for the Time to Choose exercise proved “woefully inadequate”. This is not supported by the evidence.
"The Trustee set out to achieve maximum engagement and received responses from over 97,000 of its 122,000 members. A response rate of nearly 80% is highly commendable for an exercise of this type.
“As noted by the Committee, those not responding included members who wanted to go into the PPF (and so did not need to respond) and members who were taking transfers. Inevitably, despite the trustee's best efforts, they also included members and pensioners who failed to engage with the process for one reason or another. The trustee welcomes the Committee's recommendation that the law is changed so that, in future cases of this sort, members can be switched to a replacement scheme with "deemed consent" where this is clearly in their best interests.
“The Trustee began preparing for the possibility of the Time to Choose exercise in late 2016. This preparation involved engaging external experts to update member address records and to convert Scheme data into a format which could be used by both the New BSPS (‘BSPS 2’) and the PPF to calculate the different benefits that they provide. This work involved the digitisation of over 7 million records.
“Experts were engaged to create member communications to be delivered through a range of channels to the Scheme’s 122,000 members aged between 18 and 107. Scheme communications were prepared with input from technical experts in the Trustee, Tata Steel UK, the Pension Protection
"Fund and the Pensions Regulator. Members were supported in making their choice by 41 members events across a range of locations and the availability of a free and impartial member guidance helpline service.
“In addition, all members were sent detailed but user-friendly personal information packs. For most people, the choice will have been straightforward. For some members, the best choice would depend on their personal circumstances and preferences. The Trustee provided the information that members would find most useful in making their choice.
“The New BSPS scheme and the PPF worked out the benefits members could get in different ways, with different plus points and negative points, and so it was not always possible to compare them directly. The example PPF figures provided gave a good idea of what members would get, and how that would compare to the New BSPS.
“While the Select Committee highlights that it was not possible to include full personal information in the information packs for 4,300 of the 122,000 members, those members had been given all this information in their annual statements. All members were provided with enough information to make good choices.
“The Time to Choose exercise commenced immediately after the RAA agreement was signed on 11 September 2017 and had to be concluded ahead of the BSPS entering a PPF assessment period on 29 March 2018. Although the timescale was undoubtedly challenging, the Trustee is pleased that so many Scheme members took the time to choose the outcome that was best for them based on their personal circumstances. The New BSPS offered benefits that for most members were the same or better than the PPF and around 83,000 members have taken the opportunity to switch to the New Scheme.”
New BSPS Trustee Board Appointed
The new scheme will be run by six Trustee directors. Two Trustee directors have been nominated by Tata Steel UK, two Trustee directors have been chosen from the Member Nominated Trustee directors of the current Scheme under transitional arrangements, and two are Independent Trustee directors.
The Trustee will make sure that the new scheme is ready to start paying benefits for members who switch to it. The Trustee will also make sure that suitable arrangements are in place for running the new scheme and for investing the assets that will be received from the current scheme when members switch.
Company Nominated Trustee Directors
Allan Johnston (Chairman)
Allan followed a career in the steel industry which culminated in him being an Executive Director of Corus Group Plc. Allan retired from this position in 2004, and until 2009, was HR Director for Avon and Somerset Constabulary. During this time he was the Association of Chief Police Officers' spokesperson on pensions.
Allan has also served as Chairman of the Trustees of the City & Guilds pension scheme, is non-executive chairman of UK Steel Enterprise Ltd.
Allan was originally appointed to the BSPS Trustee board in 1994 and since 2007 has served as Trustee Chairman. Allan was also a member of the Investment Committee and the Valuation and Covenant Committee.
Allan’s term of appointment runs until 31 March 2019.
Jo is a Chartered Accountant, who has worked for Tata Steel UK and its predecessors since 1993. Jo is currently Accounting and Transactions Controller, UK.
Jo was appointed to the BSPS Trustee board in 2016.
Jo’s term of appointment runs until 30 October 2020.
Member Nominated Trustee Directors
Shaun worked in the steel industry from 1974 until his retirement in 2009.
Shaun was appointed to the BSPS Trustee board in 2013 as the Member Nominated Trustee director drawn from the ranks of former employee pensioners and was also a member of the Investment Committee.
Shaun was previously a Member Nominated Trustee director of the Scheme between 2002 and 2009 and is also a non-executive director of the Gwent Hospitals Workmen's and Contributory Fund.
Peter has worked in the steel industry since 1979 and is based in Trostre Works.
Peter was appointed to the BSPS Trustee board as a Member Nominated Trustee director in 2007 and was also a member of the Investment Committee and the Valuation and Covenant Committee.
Peter and Shaun were appointed as Member Nominated Trustee directors of the New BSPS under the transitional arrangements put in place as part of the RAA process. They will remain in office until the first Member Nominated Trustee director selection process has been completed (expected to be early 2019).
Independent Trustee Directors
Catherine has worked for over 30 years in the city, with most of her career at Goldman Sachs where she was a Managing Director in the Pensions Advisory Group. She is currently an Independent Director on the Barclays UK Retirement Fund, and Independent Member of the Unilever UK Pension Fund Investment Committee and was previously Deputy Chair of the BT Pension Fund. She is also a Non Executive Director of Witan Investment Trust and Dunedin Income Growth Investment Trust.
Catherine’s term of appointment runs until 31 December 2020.
Keith is a Chartered Accountant, who spent the majority of his working life in the Financial Services industry, acting as the Finance Director of Royal Sun Alliance’s Life business and then Managing Director when the business was transferred to Resolution plc. He has been a Final Salary DB pension Trustee for the Royal Insurance Group Pension Scheme for over 12 years, the last 10 as Chair of Trustees, and he has also chaired the Pilkington Superannuation Scheme for the last 4 years; in addition he is an independent Trustee and Chair of the Investment committee of the Willis Pension Scheme.
Keith’s term of appointment runs until 30 June 2019.
27 SEPTEMBER 2017
We expect the Government to change the rules that affect ‘high/low’ pensions. This change would directly affect pensioners who chose to take a higher starting pension that will reduce after 29 March 2018. If the Government doesn’t change the rules, this could affect the future of the new scheme, and so affect any member who wants to switch to it. Please read the special update, as follows:
The Trustee Chairman has submitted a response to this consultation exercise on behalf of the Trustee board, see here.
21 SEPTEMBER 2017
Following the separation of Tata Steel UK from the British Steel Pension Scheme, there have been some media stories of members who are worried about what they’ve heard, and what might be happening to their pension.
We understand that members are concerned about changes to their pension. All members will have two options: switch to a new scheme providing the same benefits as BSPS but with lower future increases, or remain with the current BSPS and move into the Pension Protection Fund. We're working hard to provide each member with the information they personally will need to make a choice that’s right for their situation. We will be holding meetings around the country in October and November, and will announce the details of these very soon. We will send out option packs containing personal information to every member in early October. We have set up a member website at www.bspensions.com/choose which will soon have more Q&As and in October we will launch a free and impartial helpline to help members to understand and talk through their options.
Future pension increases will be reduced whichever option members choose. The new scheme will offer the same or higher increases compared to the Pension Protection Fund.
Pensioners will generally be better off choosing the new scheme. Most of our members are pensioners over 65, or receiving ill-health or spouse pensions. These members will get the same amount going into their bank account as they get now, whether they chose the new scheme or the Pension Protection Fund. Everyone else will get the same pension as now if they choose the new scheme.
The choice for non-pensioners will depend on their personal situation. Most non-pensioners will see their pension reduced if they choose the Pension Protection Fund, though there are other differences which will offset this reduction for some members. They might then choose the Pension Protection Fund as the best option for them.
We’ll explain the differences between the new scheme and the Pension Protection Fund in the information we provide to members. Members will have two months to choose their option, and they should wait for their personal option pack before they decide.
The Scheme is no longer connected to Tata Steel UK. As the Scheme's Trustee, we’re committed to providing information and support to help our members choose the option that’s right for them.
18 SEPTEMBER 2017
A Trustee Statement on its position in respect of requests to process "buddy" transfers can be viewed here."
11 SEPTEMBER 2017
British Steel Pension Scheme Separated from Tata Steel UK Limited
On 11 August 2017, the Trustee of the British Steel Pension Scheme (BSPS) announced that terms had been agreed for a Regulated Apportionment Arrangement (RAA) to separate the BSPS from Tata Steel.
The separation was completed today, after the Pensions Regulator issued its formal approval notice for the RAA. As part of the separation, the BSPS has received £550 million from Tata Steel together with a 33% equity stake in Tata Steel UK Limited.
BSPS members now have two options: to switch to a new scheme (the New BSPS) providing the same benefits as BSPS but with lower future increases, or to remain with the current BSPS and move into the Pension Protection Fund (PPF). The benefits offered by New BSPS are expected to be better than PPF compensation for the vast majority of current pensioners and for many other members. The New BSPS will go ahead only if certain qualifying conditions are met.
All 130,000 Members have already received the first in a series of newsletters outlining the proposals for separating BSPS from Tata Steel and the timetable for the consultation. Members will receive personal information and illustrations by October 2017 to assist members in making their choice.
Members will also be invited to attend meetings at locations across the country where there will be the opportunity to discuss the options in more detail with a panel, including Scheme representatives, and have their questions answered.
A dedicated website (www.bspensionschoose.com) is also now available where members can find information and see the answers to questions that other members are asking.
Guidance will also be provided by a free and impartial telephone helpline. Members will have until December 2017 to choose whether their pension goes into the Pension Protection Fund, or whether they join a new British Steel Pension Scheme.
The BSPS Trustee Chairman, Mr Allan Johnston commented:
“The BSPS Trustees can confirm that the RAA has taken effect today. Members of the BSPS now have an important decision to make regarding their pensions and we are undertaking a series of communications to ensure that they have all the information they need to make the right choice for them.
"For most members, the choice will be straightforward. For some members, however, the best choice will depend on their personal circumstances and preferences. It is very important that members make an informed decision after receiving full information about all their options and taking appropriate advice.
"The Trustee expects that the transfer to the new scheme will be completed by March 2018 and that the original, old BSPS will go into a PPF assessment period by the end of that month.”
Transfer Values - Important Update 25 August 2017
If you are not a pensioner and are more than one year from your Normal Pension Age (age 65), you may have a statutory right to a transfer value. The Pensions Office will provide a transfer value quotation on request. You would then have a three months period in which to decide if you want to take the transfer value and to choose the pension arrangement to which it would be paid. If the transfer value is more than £30,000, you must take independent financial advice.
When calculating transfer values, the Scheme currently applies an underfunding reduction. The impact of this underfunding reduction has been to reduce transfer values by 8%.
On 11 August 2017, the Pensions Regulator issued a determination notice and clearance statement for a regulated apportionment arrangement (RAA) to separate the British Steel Pension Scheme (BSPS) from Tata Steel. See the Trustee Press Release of 11 August 2017.
When the RAA takes effect, Tata Steel will pay £550 million into BSPS and will also give BSPS a 33% equity stake in Tata Steel UK Limited (TSUK). The RAA is expected to take effect on or about 11 September 2017.
Receipt of £550 million will have a positive impact on the BSPS funding position and therefore reduce the underfunding reduction applicable. Confirmation of the reduction applicable will be provided by the Scheme Actuary to the September Trustee board meeting, however it is expected that the receipt of £550 million could reduce the underfunding reduction from 8% to around 5%. The impact of a reduced underfunding reduction would be to increase the transfer value (although the Trustee cannot give a guarantee to that effect until the money has been received).
In light of the expected receipt of the £550 million, the Trustee has agreed special arrangements for members who have either formally authorised a transfer value to be paid to a new provider or hold a transfer value quotation which has not reached the end of its three months guarantee period.
For those members who have already requested payment of a transfer value and the payment has not yet been made, the Trustee has undertaken to automatically provide an increased transfer value taking into account any decrease in the underfunding reduction. The payment of the increased transfer value would be made to the chosen provider. Alternatively, those members who wish can choose to proceed with their transfer on the basis previously quoted, though this is likely to result in a lower payment.
Other members who are already in receipt of an unexpired transfer value quotation will automatically be provided with an updated quotation taking into account any decrease in the underfunding reduction. The updated quotation will be provided by October 2017. This updated quotation would be provided on a non-statutory basis with a guarantee period expiring on 4 December 2017 and it would supersede any existing quotations.
The Trustee have written to members with an unexpired transfer value quotation setting out the above options in detail.
Time to Choose
The Trustee announced on 11 August 2017 that it formally agreed terms for separating the British Steel Pension Scheme from Tata Steel. The Press Release can be found here.
All members will have choices to make and we have issued a Newsletter about this to all members.
If you did not receive the newsletter, please get in touch with the Pensions Office urgently to make sure that we have your correct contact details. We do not want you to miss the opportunity to make your choice.
By October this year, we will send you detailed information about your options.
You will then be given plenty of time to make your choice.
Meanwhile, if you have any immediate questions, please contact the Pensions Office in the first instance.
If you are not a pensioner, you may have a statutory right to a transfer value. If so, that will be one of the options you can choose.
The Pensions Office will provide a transfer value quotation on request. You would then have a three month period in which to decide if you want to take the transfer value and to choose the pension arrangement to which it would be paid. If the transfer value is more than £30,000, you must take independent financial advice.
The Pensions Office is currently experiencing high volumes of requests for transfer and early payment quotations. Special arrangements have been put in place to handle these requests, which are being processed in order of receipt. Transfer value quotations are required to be provided within three months of the Pensions Office receiving a request. Every effort is being made to provide quotations earlier than this.
Members are entitled to make only one request for a transfer value quotation in any 12 month period. The trustee is currently allowing members to request a second quotation after the first has expired. But the trustee reserves the right not to provide a second quotation at any time.
It is very important that members make informed decisions after receiving all the necessary information about their options and taking appropriate advice. A decision to take a transfer cannot be reversed and should not be rushed.