The second British Steel Pension Scheme (BSPS2) will be giving some of its member a “one-off payment” due to an “unexpected surplus”, the chairman of British Steel Pension Fund Trustee said in a newsletter to customers.
The scheme was set up in 2018 when its predecessor collapsed amid the British Steel pension transfer scandal.
At the time, the trustee agreed with Tata Steel UK that if its financial position on 31 March 2021 was better that its forecast in 2018, an additional one-time lump sum payment was going to be given to certain members.
The pension scheme has now established that £58m ($76m, €70m) will be paid out to around 50,000 clients who meet certain criteria. To qualify they need to:
- Have been receiving a pension at both 31 March 2021 – the time of valuation – and 31 March 2022; and
- Earned some or all of that pension before April 1997.
BSPS2 explained that the payment will be made to these members since it does not provide “inflationary increases on any pension earned before April 1997”. The scheme said that the lump sum “is therefore intended to provide some compensation for this, for the period between 2018 and 2021”.
Members can expect a letter from the trustee around June 2022, which will include the sum expected to be paid.
The pension scheme said that, for the vast majority of the 50,000 clients, this will average to at least £250 each before any income tax is deducted.
The payment is expected to be made in October 2022.
