A former mayoral pensions adviser has outlined a bid to save Tata Steel’s British retirement scheme, according to reports.
Edi Truell, an investor who advised former Mayor of London Boris Johnson on pension issues, is reported to have sent a fresh offer to the trustees of the £13.6bn British Steel Pension Scheme.
Truell (pictured), who tried to buy Tata’s UK steel operations last year, is reportedly planning to merge the company’s speciality business with Sheffield Forgemasters. His charity will then invest £200m into the business, while he and Luke Webster, a public sector pensions’ director and his Disruptive Capital colleague, will join the scheme’s board of trustees, reports claim.
But independent pension consultant John Ralfe is not convinced. “I know Edi Truell. It beggars belief. He’s not stupid, so I don’t know why he is making himself a laughing stock.”
He said that what Truell is trying to do now, if reports can be believed, is a version of what he was trying to do last autumn. This included putting a big chunk of money into the business, securing some sort of guarantee from the government and Truell to “sprinkle his fairy dust to say: ‘Let’s invest in equities and all sorts of other things and that will generate a super return’.
“What he [Truell] now seems to be doing is setting himself up as an expert in consolidation in the UK steel industry,” Ralfe added.
“If a merger with Forgemasters made sense someone at Tata Steel, or Forgemasters, or at one of the many investment banks would have thought about it,” he said.
Ralfe is equally cynical about the claim that Truell wants to join the board of trustees. “You don’t rock up and say ‘Hello, I would like to be a trustee’. That is not how trustees are appointed.”
The scheme is at the centre of such speculation due to Tata’s attempts to close it to new entrants, offer a less generous pension to existing members and separate the fund from the business, leaving it without a sponsor.
The problem is not the size of the deficit, but the number of people paying in. Only one in 13 members is believed to contribute to the scheme.
Tata has agreed to pay hundreds of millions of pounds into the scheme, although this is so that the trustees would approve the sale of Tata’s assets in the Netherlands to German industrial group ThyssenKrupp.
Some criticise Tata’s plan believing that it would be easier to find a buyer for the UK business if it was not responsible for the pension scheme.
Truell could not be reached for comment at the time of publication.
