Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Report reveals govt. received £4bn from miners’ pensions

pensions

The inquiry by the BEIS Committee found that the government has so far received £4.4bn – more than double what was expected

The Mineworkers Pension Scheme and its controversial ‘surplus-sharing arrangement’, meaning surplus is shared 50:50 between the government and members, was subject to a parliamentary enquiry by the Business, Energy and Industrial Strategy (BEIS) Committee.

The government guaranteed that pensioners would always receive the benefits they had earned up until to the privatisation of British Coal in 1994, and that these benefits would rise in line with inflation.

However, in return for this guarantee, the government is entitled to receive 50 per cent of any surplus in the scheme’s value at subsequent valuations.

Wentworth and Dearne MP John Healey says that the government simply cannot justify getting billions from a scheme they’ve never put anything in that was built on the backs of miners.

The committee’s report, published today, says the government failed to conduct due diligence during the 1994 negotiations, and was negligent by not taking actuarial advice.

It says the 50:50 split is arbitrary and the government’s share is not proportionate to the degree of financial risk it actually faces.

In December Mr Healey and other coalfield MPs called for the inquiry to scrutinise how the surplus-sharing arrangements were agreed, the government’s role as guarantor of the scheme, and the continued appropriateness of the 50:50 split.

The inquiry found that the government has so far received £4.4bn – more than double what was expected – and is set to receive at least £1.9bn more. The Government is a guarantor but has paid nothing in and is not expected to have to.

The average miner gets £84 a week. Half get less than £65 a week, a quarter less than £35 a week, and one in 10 gets less than £18 a week.

The Select Committee recommends a revised agreement where the government only receives a share of surpluses if the scheme falls into deficit and they have to make up the shortfall, and for miners to get an immediate cash boost from transferral of a £1.2bn fund.

I’ve been fighting on this for years but all I get from Ministers is that they won’t even consider a review. It’s shameful, added Mr. Healey.

Thousands of ex-miners are dying every year, and those still with us are suffering with poor health and struggling to get by every day. They need help now and an immediate increase to their pensions, he said.

The BEIS report says: Given the vast sums which have been paid to the Government, it is unconscionable that many of the scheme’s beneficiaries are struggling to make ends meet.

The report says that it is patently clear today that the arrangements have unduly benefited the Government, and it is untenable for the Government to continue to argue that the arrangements remain fair. Government should not be in the business of profiting from mineworkers’ pensions.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.