The trustees of British Steel Pension Scheme II, the plan created last year, are not currently analysing any buy-out proposals, even though that is the end goal.
In a statement published on the scheme’s website, the trustees responded to media reports which claimed that BSPS had kicked off discussions with a number of insurance giants about a buyout of the scheme.
The trustees stated they were looking at options to improve the security of members’ benefits but had not singled out a sale.
"This review is still in the very early stages and no proposals have, as yet, been considered," the trustees sated.
The new scheme's actuarial valuation as of March 2018 showed a surplus of £668m on technical provisions, which represented a funding level of 106.3 per cent.
But on a buy-out basis – the cost for an insurer to take on the liabilities of the scheme – the funding level was 90 per cent.
The trustees' aim is that over time - as benefits are paid out and the scheme matures - the BSPS funding level will reach 103 per cent on a buyout basis.
If that happens, then it will proceed to buy-out with one or more insurance companies, and it will honour the commitment made when the scheme was established.
One of the conditions of BSPS II was that it didn't provide increases to benefits accrued before 1997, which happened in the previous plan, and it used the consumer price index for indexation, instead of the retail price index used by the old scheme.
But there is an agreement that additional payments can be made to members if certain circumstances are met, such as an unexpected surplus being disclosed by the 2021 actuarial valuation or if the buy-out funding level reaches 103 per cent.
If the scheme proceeds to buy-out in these circumstances, the trustees expect any surplus won't be paid to Tata Steel.
Stefan Zaitschenko, a former Tata Steel worker who helps run a Facebook group for members of the old and new scheme with 5,100 participants, told FTAdviser this was a reason to worry.
He said: "Our concerns related to the release of surplus above the buy-out 103 per cent level to Tata Steel UK and a windfall for a sponsor who had not provided financial assistance.
"It was the deficit of BSPS I which led to our reduction in benefits after all."
BSPS members were asked to decide by December 2017 whether to move their defined benefit pension pots to a new plan, BSPS II, or stay in the existing fund, which was then moved to the Pension Protection Fund as part of a restructuring of pension liabilities.
About 8,000 members transferred out of the old scheme by October last year, with transfers collectively worth about £2.8bn.
But several steelworkers reported delays in the transfer process, with several complaints reaching the Pensions Ombudsman.
Concerns about the suitability of transfers from the British Steel scheme have also been raised, and 10 advice firms stopped giving transfer advice as a result, although some have now resumed this service.