Govt considers mineworkers’ proposals but fails to address 50:50 split

The government is considering proposals to reform the current Mineworkers Pension Scheme (MPS) to protect members’ existing bonuses but will not be reviewing the current 50:50 split in surpluses.

In a parliamentary debate on Monday (10 June), Parliamentary Under-Secretary of State for State for Business, Energy and Industrial Strategy, Andrew Stephenson, said that he had written to the Treasury in “full support” of the trustees’ proposals which would see members pensions rise in line with the Retail Price Index (RPI).

However, he added that the six proposals he has agreed with the trustees and sent to the Treasury do not cover the 50:50 split of the scheme surplus, which has earnt the government roughly £4.4bn since the arrangement was introduced in 1994.

Stephenson said: “I have reviewed the trustees’ proposals, which my officials have been considering for some time, and I wrote to Her Majesty’s Treasury last week giving them my full support.

“Central to the trustees’ proposals is protecting existing bonuses. Under that option, if there is a deficit in the future, members will still see their guaranteed pensions continue to rise in line with RPI, and their current bonuses will not be eroded.”

According to Stephenson, the trustees’ priority is protecting existing bonuses, rather than “renegotiating a greater share of future surpluses.

He added that proposals would mean a “significant additional liability for the government”.

The number of mineworkers in receipt of their pension has fallen from 175,000 in 2011 to just over 135,301 as at 30 September 2018.

Labour MP for Easington, Grahame Morris, who brought forward the debate, said: “There is no evidence that the current sharing arrangements can be considered fair or reasonable … We know a lot more about the Mineworkers’ Pension Scheme and the associated risks that it faces than we did in 1994.

“If the 50:50 split represented the risk in 1994, 25 years later the risk to the government is marginal. After a quarter of a century, they have never made a single contribution to the fund.”

A report produced by First Actuarial suggested that a 90:10 split of future surpluses in favour of the scheme would be a “fair return to the government”.

Labour MP for Barnsley East, Stephanie Peacock, said that the new proposals was a “red herring”.

In February, the government defended its position on the scheme, but added that it was open to cross-party with the trustees on the issue.

Stephenson, who has been in the post for two months, said he will be meeting with the chair of trustees on 24 June.

The debate, brought forward by was called after a petition which had more than 100,000 signatures was delivered to No. 10 Downing Street in March.

Pensions Age has contacted MPS and the National Union of Mineworkers for comment.

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