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Trustee response to speculative media coverage

Following recent speculative media coverage regarding the Scheme, the Trustee has been asked about the treatment of Scheme assets in the event members’ benefits are secured with an insurance company. The Trustee Chairman has issued this statement:

 

The Trustee’s priority will always be to ensure that benefits are paid in full and on time, not just today but until all benefit commitments have been met. This means that the Trustee needs to manage the risks facing the Scheme and do whatever it can to enhance the security of members’ benefits. The Trustee is currently looking at what options might be possible to improve the security of members’ benefits. This review is still in the very early stages and no proposals have, as yet, been considered by the Trustee. Members will be kept informed of developments.

At the last triennial actuarial valuation, as at 31 March 2018, the Scheme reported a surplus of £668 million on an on-going, technical provisions, basis. This equates to a funding level of 106.3%. The Scheme Actuary however estimated at that time that the assets of the Scheme would have met only 90% of the cost of securing all Scheme benefits with an insurance company (the estimated ‘buyout’ cost).

The Trustee’s aim is that over time (as benefits are paid out and the Scheme matures), the BSPS funding level will reach 103% on the “buyout” basis and, if that happens, the assets of the Scheme will be used to secure benefits with one or more insurance companies, including restoration of benefits in accordance with the provisions agreed when the new BSPS was established. In this scenario the Trustee does not expect there will be any surplus paid to Tata Steel.