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THOUSANDS of retired Gwent steelworkers could lose “hard earned” money, it has been claimed, after an agreement ushering in sweeping changes to their pension arrangements.

Steel giant Tata’s proposal that its UK pension scheme be separated from the business was approved by the Pensions Regulator earlier this week.

Members must now choose to remain in the existing scheme - making them eligible for Pension Protection Fund (PPF) compensation - or switch to a modified British Steel Pension Scheme (BSPS).

The latter will have lower annual increases in the future for pensioners and deferred members - those who have stopped paying into a scheme, but have yet to start drawing from it, though both involve decreases in current remuneration.

But some retired and current steelworkers who have contacted the Argus, fear the devil of the deal lies in a little-publicised detail.

British Steel Pension Members, a 4,000-strong Facebook group, warns that contributions made before April 1997 will no longer be indexed against Retail Price Inflation, as currently.

“For our older pensioners that will affect all of their pension, so they will face a year-on-year, real terms reduction to their pension,” said a spokesman.

“As BSPS trustees have provided little information so far, BSPS pensioners will not know of this major impact on their future finances.”

A retired Gwent steelworker, who did not wish to be named, spoke of “severe consequences” for thousands who worked at sites such as Llanwern, Orb Works and Whiteheads in Newport, Panteg, and Ebbw Vale, who paid for a “hard earned” RPI-linked benefit during decades of service.

“Quite simply, no increases will be given to pensioners who retired before 1997,” he said.

“This was done without consultation or representation with the pensioners, only with current workers.

“Indeed, every pensioner that I know personally and have contacted, are gobsmacked.”

The deal approved this week was reached under a Regulated Apportionment Arrangement (RAA) normally only used for schemes with insolvent employers.

The BSPS has not commented, but its trustee chairman Allan Johnston said earlier this week that “members now have an important decision to make regarding their pensions.” He added that “a series of communications” will ensure members have the information they need.

It is expected that transfers to the new scheme will be completed by next March. The group can be found at facebook.com/groups/bspsmembers