Tata Steel has offered to pay “hundreds of millions” of pounds to its 130,000 member-strong pension scheme.
According to a report in sister newspaper the Financial Times, the deal would release a guarantee the pension fund holds over its Dutch assets and smooth the way for a merger with ThyssenKrupp, its German rival.
In an interview Allan Johnston, chairman of the pension scheme’s trustee board, said: “We are in meaningful negotiations with the company now.
“We’ve had an improved offer for the release of the security package.”
The Indian group is restructuring its business following an announcement last spring that it wanted to exit the UK following years of losses.
It wishes to detach its £15bn pension fund, which it has said has become a significant financial drag.
Last year MP Frank Field launched an inquiry into defined benefit pensions to find “radical solutions” to the increasing pressures on retirement savings posed by rising life expectancy and stubbornly low investment returns.
The work and pensions select committee chair said unsustainable promises made to scheme members were being “stacked up against” the jobs of younger generations.
Without urgent action, “the impact on millions of people’s living standards from intergenerational trade-offs of income and wealth are brutal”, he said.
Mr Field did not specify the nature of these “radical solutions”.
But in a previous interview with FTAdviser, the MP for Birkenhead explicitly stated they could include reductions in member benefits.
His comments came a day after the government revealed it was considering changing the law to allow the British Steel Pension Scheme to peg its annual benefit increases to the consumer price index (CPI) rather than the normally higher retail price index (RPI).
The proposal was part of an effort to find a buyer for the scheme’s sponsor, Tata Steel UK.