Govt revises its share of Mineworkers’ Pension Scheme surplus figure

The government has revised its answer to a parliamentary written question to correct the amount of money it has received as its share of surpluses from the Mineworkers’ Pension Scheme.

In the original answer, published in October 2020, Minister for Business, Energy and Industrial Strategy, Kwasi Kwarteng, said that the government had received £3.41bn as part of the surplus-sharing arrangement with the scheme.

However, in an update to the answer, Kwarteng revealed that the government has actually received £3.11bn as its share of the surpluses.

The government and the scheme trustees reached an agreement on the future arrangements for pensions from the scheme after the privatisation of British Coal in 1994.

This saw the government guarantee that any pension earned up to privatisation would not fall in cash terms, with any surplus at subsequent valuations to be shared equally between scheme members and the government.

However, the arrangement has been a source of controversy since, with the Coalfield Communities Campaign arguing for a review of the agreement in the 2000s, stating that a “50 per cent share of an unexpectedly large surplus is too much”.

Whilst no changes were made at that time, in April 2019, an open letter to the Chancellor of the Exchequer from the scheme again called for greater protection for scheme members' bonuses and a larger share of the surplus for workers.

Subsequently, in July 2019, Mineworkers’ Pension Scheme trustees wrote to scheme members to confirm that they had received support from the Energy Minster for a proposal for greater protection of existing benefits, which was then agreed to in November.

However, the scheme clarified that whilst a change in the surplus share would be welcome, it would only lead to bonuses for members if investment returns were strong, in turn requiring a riskier investment strategy.

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