This week I attended a debate in the House of Commons which sort to redress the balance within the Mineworkers’ Pension scheme. When the scheme was first established it was decided that any yield from the scheme would be split 50/50 between mineworkers and the UK Government.
When British Coal was privatised in 1994, an arrangement was made between the then Government and the trustees of the British Coal pension schemes – the Mineworkers Pension Scheme (MPS) and the British Coal Staff Superannuation Scheme (BCSS) – on their future arrangements.
It was agreed that:
• The existing schemes would be closed to further contributions
• The Government would take over the role as Guarantor for the Scheme from British Coal.
• 50% of the surplus in the scheme would be used to enhance members’ pensions immediately, with the other 50% being payable to the guarantor.
• The Guarantor agreed to leave its share of pre-privatisation surpluses in the Scheme as the Investment Reserve. This was to be paid to the Guarantor over a 25-year period to 2019.
• For scheme members, the Guarantee meant that they would always receive the benefits they had earned up to privatisation, increased in line with inflation. I.E. they would not see a fall in cash terms in their pension earned up to privatisation.
Since then the UK Government has not made any direct payments into the scheme.
It was discovered in November 2018 that the UK Government said they had received £4,328 million under the surplus sharing arrangements since 1994.
Labour MPs are demanding an immediate review of the 50/50 split as the UK Government is receiving large pay-outs and mineworkers, who are sadly passing away, are proportionally receiving less from their pension due to the split.
Everyone deserves a decent pension. When British Coal was privatised the UK Government in 1994 agreed a 50/50 split between mineworkers and themselves. But years of hard toil in the pits has meant that the number of mineworkers on the pension scheme has fallen but the UK Government have kept the original terms in place. This is not right as mineworkers are not getting their fair share.
It is really important that an urgent review is undertaken of this 50/50 split. It cannot be right that the UK Government can receive £4,328 million since 1994. Some of this should have gone back to mineworkers.
The UK Government is the guarantor of the scheme and therefore will require some income from the fund to ensure that if any difficulties arise it can pay the difference, but the amount being taken doesn’t seem justified to many people on the Mineworkers’ Pension Scheme.