It’s questionable whether such a step would be possible, or appropriate, in the case of a private sector company, as it could amount to state aid. However, the other possibility would be for BSPS to fall into the Pension Protection Fund (PPF), a move that already has some precedent when one of the UK’s other traditional industries, coal, encountered problems.The two industry-wide funds associated with the coal industry entered the lifeboat fund as part of a wide-ranging restructure of its sponsor in an attempt to keep coal mining viable in the UK. As part of the agreement to sever ties with its sponsor, UK Coal, the funds were granted a controlling stake in a new property venture. But attempts to keep the industry viable were scotched by a later fire in one of the remaining coal pits. So the absorption of the BSPS into the PPF would not be without precedent, but for the Pensions Regulator (TPR) to agree to such a move, Tata would likely need to offer a reasonable (and costly) settlement to the trustees.The trustee board has so far remained quiet about Tata’s selling out of the UK, only saying that it would expect the company to “discuss […] the implications” of any sale or restructuring. The government must now proceed carefully. TPR’s independence must be preserved, and no impression must be given that either the regulator or the PPF were asked to agree to a deal that is detrimental to those already within the PPF.While the PPF is currently well-funded, and last March reported a £3.6bn surplus, the desire to keep an ailing industry open and avoid the significant unemployment that would come with the collapse of the UK steel industry, must not lead to an outcome that looks like a sponsor dumping its pension obligations – precisely a scenario the current regulatory framework is meant to avoid. With the collapse of the UK steel industry a distinct possibility, Jonathan Williams looks at the future of the British Steel Pension FundAs the UK faces the prospect of its steel industry winding down, attention has focused not only on the possibility of a temporary nationalisation of some of the assets owned by Tata Steel but also on the fate of the British Steel Pension Scheme (BSPS), sponsored by Tata. With £14bn (€19bn) in assets this time last year, BSPS was among the UK’s larger pension funds – and hardly in a unique position that it was reporting a deficit. It is this shortfall – £553m on an ongoing basis in 2011 and up to nearly £1.2bn by 2013 – that means the scheme will play a material part when it comes to settling the future of steel manufacturing in the UK.Commentary in recent days has remarked that Tata’s UK business is a pension fund producing steel, often used when pension obligations are viewed as overwhelming. This perception – however mistaken it may be when part of the funding difficulties are simply down to the low-interest-rate environment – has led to suggestions the government should take on responsibility for the pension fund, including from former secretary of state for business Vince Cable.Cable’s intervention is notable. It was under his tenure the UK government took on the majority of the liabilities associated with Royal Mail, in an attempt to make the company more attractive to private investors ahead of its flotation in 2013. The listed company was left with a significantly scaled-back pension liability and a pension fund now firmly in surplus, while the remaining pensions owed are now simply part of government expenditure.