Last week, alongside 35 fellow MPs, I wrote to the Chancellor regarding the surplus sharing arrangements for the Mineworkers’ Pension Scheme (MPS), writes Sir Kevin Barron MP.
The original 1994 arrangement saw the UK Government agree to guarantee the scheme and all pensions in cash terms in return for a 50 per cent share of any subsequent surpluses.
This has seen the Government receive a total of around £4.1 billion from the scheme since 1994, although it has not paid into the scheme itself.
Whilst we fully recognise the importance of the Government guarantee and the protection that it provides, we do believe that there is a strong case both for providing greater protection for pension bonuses and for revisiting the sharing arrangements.
We understand that MPS trustees have been in communication with the Department for Business, Energy and Industrial Strategy (BEIS) and have put forward a proposal for consideration.
The strong returns generated by the scheme make the current 50-50 arrangement difficult to justify.
We want the Government to include a stronger level of protection for members’ bonuses as part of the guarantee and to consider taking a reduced share of the surplus.
To this end, we requested that HM Treasury undertake a formal review of the surplus sharing arrangements, the case for reform and means of enhancing existing bonuses.
We look forward to working with all parties involved to assist with this and how we can work together to make sure that former mineworkers, their families and communities receive their fair share for their decades of hard work.