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. Read more “Mineworkers’ Pension Scheme”