Tata Steel workers accept pension reforms despite reduced benefits

Tata's offer included a £1bn investment commitment at Port Talbot and no compulsory job losses

The Indian conglomerate said last year that it would sell its UK business but it has since decided to seek a partner (Getty)

Thousands of UK steelworkers have agreed to a rescue deal with Tata, securing the future of their pensions albeit on less favourable terms.

The deal agreed on Wednesday will safeguard thousands of jobs and will guarantee £1bn worth of investment from Tata over the next ten years. However the current final salary pension scheme will be terminated as part of the deal and replaced with a less generous one.

Roy Rickhuss, secretary general of the Community union, said steelworkers had taken a "tough decision".

Members of Community, which is a cross-industry union, backed the new deal by 72 per cent in favour and 28 per cent against. Turnout was more than 70 per cent.

“Nobody wanted to be in this situation but, as we have always said, it is vital that we now work together to protect the benefits already accrued and prevent the [British Steel Pension Scheme] from free-falling into the Pension Protection Fund,” Mr Rickhuss said.

"This ballot involved an extremely personal decision for everyone that voted. Whichever way our members cast their votes, we know they will not have taken that decision lightly and everyone's opinions must be respected,” he added.

The three unions at Tata’s UK plants had recommended that their members accept the deal despite admitting it was not “without issues”.

Tony Brady, national officer for Unite, added the steelworks have made “great sacrifices” to ensure the UK’s steel industry has a future and Tata must now honour its commitments.

He said that anything less “would be a betrayal and add to the deep mistrust that steelworkers now have for the company”.

The Unite member vote in favour of the change with a 76 per cent to a 24 per cent split. GMB members voted in favour with a 74 per cent to 26 per cent divide.

Under the proposal, Tata will spin off its pension scheme into a separate entity, with the British Steel Pension Scheme to be closed to future accrual. It will be replaced with a defined contribution scheme. The BSPS is one of Britain's largest pension schemes, with 130,000 members.

The Indian conglomerate said last year that it would sell its UK business but it has since decided to seek a partner and has been in lengthy talks with German firm ThyssenKrupp.

A Government spokesman said: "This positive vote is an important step forward for the future of Port Talbot and Tata Steel in the UK and it is now vital that all parties work together to deliver on the agreed proposals."

Additional reporting by PA