WORKERS at a Gwent steel plant dramatically suspended an overtime ban last night following a breakthrough in a row over company pensions.

Employees of Caparo, which makes welded tubes for industry, began a work-to-rule this week over plans by the firm to ditch its final-salary company pension.

But yesterday Caparo agreed that independent experts should look at the scheme's finances and hold talks with the ISTC union on its future.

Final salary schemes guarantee that pensions are based on the salary in the year before retirement, normally the best an employee has earned.

Caparo, along with an increasing number of UK firms, claim the final-salary scheme is too costly and wants to switch to one where employees buy their own annuity with pension contributions.

ISTC general secretary Michael Leahy said this morning the suspension would also apply to Caparo's Scunthorpe plant.

"Our members at Caparo are not militant," he said. "They are committed to making the company economically successful. All they want is the security in retirement that they have saved for.

"The decision by Caparo is a victory for common sense, for ordinary working people and for trade unionism.

"Consultation begins in advance of taking a decision, not after it and limited to deciding how it should be implemented.

"Any other company employing ISTC members who are considering closing their final salary scheme should be in no doubt that the union will put its full resources behind defending our members' pensions."

Caparo made no statement about their decision last night but have said the ISTC action was precipitate and discussions were taking place.