Workers who spoke to The Herald said they had been given no adequate explanation for months. Some said they had been told Aviva, the provider, would not accept payments from an overseas account, while another said staff were told it was because the payment “came from a different fiscal regulatory body”.
The pension problems come as the Scottish Government pursues the troubled GFG Alliance in court over the Lochaber smelter.
Ministers have asked a judge for an interim interdict to prevent breaches of the terms of the controversial Lochaber Guarantee Reimbursement Agreement, which underpins their 2016 guarantee of the smelter’s power purchase.
The firm is also currently under investigation by the Serious Fraud Office.
Employer and employee pension contributions for workers at Sanjeev Gupta’s Lochaber smelter have not been paid since July (Image: Alvance British Aluminium)
In his email, Mr Kabel wrote: “Aviva informed us earlier in the summer that following a change in our bank account for payments, they are unable to receive amounts to the Scheme, who in turn credit your individual accounts.
“Despite our best efforts, this remains the case. As a result, while we are ready and willing to make the scheduled pension payments, employer and employee pension contributions since July remain outstanding.”
He added: “We have constructively and urgently engaged with Aviva since we were made aware of the situation to find a solution as soon as possible.
“We have been providing regular updates to Trade Union representatives and managers on the situation and our discussions with Aviva and have also notified the Pensions Regulator (TPR).
“While a solution has not yet been identified, this remains the utmost priority for us, and I am personally engaging with Aviva and other stakeholders to work towards a resolution.”
Mr Kabel acknowledged the strain on staff, saying the difficulties had been a source of significant concern.
He told them the money was “safe and available for payment to the pension scheme as soon as this becomes possible”.
The email, marked “Internal message”, was sent after The Herald approached the company.
Aviva told The Herald it cannot currently accept further payments but did not say why.
A spokesperson said: “We are currently unable to accept further pension contributions into the workplace pension plans for members of this scheme.
“We have robust processes in place to protect our customers’ pension contributions and savings. Existing pension contributions within the pension plans are secure, and we are working with Alvance British Aluminium Limited as to next steps in relation to further contributions.”
A GFG Alliance spokesperson said: “Alvance is and has been ready to make the scheduled pension payments but Aviva have indicated they are unable to receive and credit amounts to employee accounts at this time.
“We are working with Aviva to reach a solution as soon as possible.”
The same issue surfaced at the GFG Alliance’s Dalzell steel mill in August. Liberal Democrat MSP Willie Rennie wrote to ministers that month saying sources told him payments had stopped because Aviva would not accept the payments the plant’s operators were forwarding “due to concerns over the source of these payments”.
In late 2024, workers at Mr Gupta’s Speciality Steel UK in Stocksbridge and Rotherham stopped receiving employer pension contributions after the company said its pension provider could not accept payments while it carried out due diligence on a change of bank account. Aviva was the provider there too.
Workers went close to a year without contributions. Government-appointed special managers committed to making them up after the business was put into liquidation. A judge had found the company “hopelessly insolvent”, with £600,000 in the bank against a monthly wage bill of £3.7 million.
A spokesperson for the Pensions Regulator said: “We take non-compliance with pension duties seriously but do not comment in relation to individual employers or pension schemes unless appropriate to do so.
“To ensure people get what they are due, we first and foremost support employers to meet their legal automatic enrolment duties.
“But where necessary, we will take action using our powers to protect people’s savings.”
Mr Rennie called on ministers to get involved. He said: “I recently wrote to the government to ask whether it was correct that payments into the employee pensions have stopped. It seems we now know the answer.
“The government cannot continue to be silent about this. I have been warning for years about the risks of being so closely linked with Sanjeev Gupta, including writing to ministers on multiple occasions and urging them to take the bull by the horns.
“The government can’t hide from this anymore. It’s time for them to be clear with taxpayers about what is at stake.”
Economy Secretary Stephen Flynn told Holyrood‘s Finance and Public Administration Committee last month that the Scottish Government had identified “unauthorised transactions” at the smelter.
GFG Alliance says the dispute relates to support the smelter had been providing towards the restart of the Dalzell steel plate mill in Motherwell.
It says it has given the undertakings requested by the Scottish Government and that the matter does not affect day-to-day operations or employment at Lochaber.
Meanwhile, last month The Herald revealed that the company trading as Jahama Highland Estates, whose staff were also copied into Mr Kabel’s email, remains in line for £2.3 million of public money.
Scottish Forestry has confirmed that a Forestry Grant Scheme award to SIMEC Lochaber Hydropower 2 Ltd, which trades as Jahama Highland Estates, is “valid and live”, and said it has no concerns about paying it.
The Lochaber agreement has faced sustained criticism since it was struck in 2016 as part of a “back-to-back” deal in which the Scottish Government briefly took ownership of the Dalzell and Clydebridge steel plants, buying them from Tata Steel for £1 before immediately selling them on to Mr Gupta’s Liberty House for the same price.
It was negotiated in a matter of days during the pre-election period, with limited parliamentary scrutiny at the time.
The Scottish Government guaranteed GFG’s purchase of the Lochaber aluminium smelter and its hydro power stations from Rio Tinto, while GFG committed to buying electricity from the hydro scheme for 25 years.
Ministers promised to step in and cover the power payments if GFG ever failed to do so, under a deal that initially exposed taxpayers to up to £586 million.
In June, a Singapore High Court found Mr Gupta had displayed a “systemic lack of probity” in his management of Liberty Industries Holdings, a GFG entity, and said it should be wound up.
The court scrutinised a 2016 agreement under which SIMEC Lochaber Hydropower 2 sold assets worth £42 million to Alvance British Aluminium, the operator of the Lochaber smelter. The judge found the money owed from that deal was moved through a chain of Gupta-controlled firms.