That raised fears the plant would close if Tata couldn't find a buyer, eliminating 4,000 jobs.
The jobs have been at risk since March when Tata Steel announced it was putting its United Kingdom business up for sale amid losses of more than £1m a day, sparking a political crisis as the government scrambled to secure the future of Port Talbot, which is one of only two sites in Britain that produces steel in blast furnaces.
On Wednesday, unions announced a number of "significant" measures after talks with Tata, including keeping two blast furnaces at Port Talbot for five years, a commitment to seek to avoid compulsory redundancies for a similar period, a 10-year investment plan of £1 billion, and consultation on replacing the pension with a defined benefit scheme.
The deal made by the Indian steel giant also include retaining both of Port Talbot's blast furnaces, one of which was supposed to stop production in 2018 but unions demanded to keep it open.
Tata Steel UK on Wednesday offered British unions a deal guaranteeing jobs and investment in return for cutbacks to pensions, moving the company a step closer to merging its European assets with Germany's Thyssenkrupp.
The proposed changes to future pension provision and other employment terms are necessary to de-risk the [organisation] and help achieve long-term sustainability.
Roy Rickhuss, general secretary at Community, said: "This is not the end of the process and it will be for all our members to now vote on this proposal".
Several unions have praised the announcement.
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The news followed a breakthrough on jobs and investment on Wednesday aimed at securing Tata's United Kingdom business following months of uncertainty.
Community said it was continuing to work hard to secure a future for these sites. "The commitments made today by our reps must now be followed by a commitment from the government that they will hold Tata to their word and ensure jobs are protected".
The new proposal differs from a previous proposal put forward by Tata Steel UK, where the DC pension arrangement would have employer and employee contributions of 3%.
But he called for Government action on a long term plan for the sector "that secures the future of the thousands of livelihoods and businesses relying on this critical industry".
They are concerned that if they agree to let Tata close the current British Steel Pension Scheme (BSPS), the company will look to spin it off into a standalone entity that could eventually fall into the Pension Protection Fund (PPF) if necessary.
"This is good news that secures the future of steel-making at Port Talbot for at least 10 years", Carwyn Jones, the First Minister of Wales, said on Thursday.
Bimlendra Jha, chief executive of Tata Steel UK, said: "Today's announcement from the Welsh Government will be an important contribution towards developing a sustainable future for our steel business based in Wales and throughout the UK".
"We are also working separately on a necessary structural solution for the British Steel Pension Scheme fund", Chatterjee was quoted as saying in the statement.