Steelworkers act over pensions threat

Caparo faces action over final salary scheme changes

Steelworkers in south Wales are due to begin an overtime ban over the closure of their final salary pension scheme.

Around 100 workers at the Caparo Natural Gas Tubes plant at Tredegar said the action would go ahead on Tuesday afternoon unless an agreement with the management is reached.

The industrial action follows Caparo's decision to replace its final salary pension scheme with a new system based on stock market performance.

The ISTC have threatened strike action

The action to defend pension rights is the first of its kind in the UK.

The Caparo Group, owned by Labour peer Lord Paul, is one of the UK's largest steel businesses with branches in Scunthorpe, Tredegar, Walsall and Wrexham.

The north east Wales workers are also voting to decide whether or not to ban overtime.

The results of that ballot are due be disclosed at the end of this week.

The Tredegar workers are angry their pension scheme is being replaced for both new and existing members.

Modest incomes

Workers at the company's Scunthorpe plant carried out an overtime ban last Friday, ahead of the proposed action at Tredegar on Tuesday.

Stakeholder pensions were launched in April last year as a low-cost way for those earning modest incomes to save for retirement, and ease the burden on state coffers.

Like other pension plans, money paid into a stakeholder pension is invested in items such as stocks and shares, bonds and cash savings accounts.

However, ISTC members in Scunthorpe and Tredegar opposed to the plans have already voted to take strike action if Caparo refuse to comply with union wishes.

The union wants Caparo to suspend the scheme and meet the union to discuss other options.

Poor markets

Michael Leahy, ISTC General Secretary, said Caparo workers are "outraged" that their security in retirement is being threatened.

"ISTC members at Caparo face the prospect of a much reduced income after years of service than that which they expected," he said.

An increasing number of companies have closed their final salary pension schemes over the last few years, blaming poorly-performing stock markets, punitive taxation and a new accounting standard.

A recent poll revealed plans by a quarter of small firms to wind-up or close schemes within the next year.

In their place, companies are offering riskier schemes, known as "money purchase" plans, which pass on the investment risk to the worker.