Tata Steel employees have voted overwhelmingly in favour of closing their defined benefit pension scheme to new accruals.
Following the advice of their unions, more than 70 per cent of members voted in favour of changes that will see all future pension contributions paid into a defined contribution scheme.
The terms of the deal guarantee contribution rates of 16 per cent of earnings - 10 per cent coming from Tata Steel, and 6 per cent from the employee.
They also guarantee that Tata Steel will keep two blast furnaces open in Port Talbot for at least five years and that £1bn of investment will go into the UK business over the next 10 years.
However, a spokesperson for GMB, one of the unions representing Tata workers, stressed that today's vote did not resolve whether or not the British Steel Pension Scheme would fall into the Pension Protection Fund, which would see pension savers lose 10 per cent of the their retirement pots.
Tata employees are represented by three unions: Unite, Community and GMB. Unite members voted 75.6 in favour, Community 72.1 per cent in favour, and GMB 74 per cent in favour.
Tony Brady, national officer for Unite, said members had not taken the decision to vote in favour of the changes lightly, adding it had been a "hellish" time for Tata Steel employees.
He said uncertainty had "swirled around the steel industry over this past year or more".
He called on the government to "repay the sacrifices and the commitment shown by steelworkers to their industry by stepping up to support steel and secure its future".
Roy Rickhuss, general secretary of Community, said the vote provided "a clear mandate" from members to move discussions forward with Tata to find a "sustainable solution" for the British Steel Pension Scheme.
"Steelworkers have taken a tough decision and have shown they are determined to safeguard jobs and secure the long-term future of steelmaking," he said.
"Nobody wanted to be in this situation, but as we have always said, it is vital that we now work together to protect the benefits already accrued and prevent the BSPS from free-falling into the pension protection fund."
Tata Steel has been in discussion with unions and the government over ways to save the UK business for close to a year.
One solution has been for Tata to sell the business.
However, the pension scheme - which is in significant deficit - is seen as a major hurdle to a potential sale.
In June last year, the government proposed changing the law to allow the scheme to link annual increases to the consumer price index, rather than the higher retail price index.
This would have made it considerably less expensive to fund the pension scheme, thus making it less of an obstacle to a sale. The proposal received fairly wide support, with even BSPS trustee chairman Allan Johnston backing the deal.
However, the proposal was shelved following the vote to leave the EU.
While today's union vote will reduce Tata Steel's pension costs, the issue of indexation is still unresolved.
The Department for Work and Pensions is due to release a green paper on the future of DB schemes any day, and indexation is almost certain to be included.
In a speech earlier this month, pensions minister Richard Harrington said he had an open mind about allowing schemes to switch from RPI to CPI, adding the issue “has to be looked at”.
james.fernyhough@ft.com
