On the go: The government has agreed to guarantee members of the Mineworkers’ Pension Scheme an annual increase in line with the retail price index, even if there is a deficit in the pension fund.
Kwasi Kwarteng, minister in the Department for Business, Energy and Industrial Strategy in the last Conservative government, has written to the trustees accepting the proposals made in July, and these will soon be implemented.
The bonus pension is an additional payment provided to members from the good investment returns made on the scheme’s assets, which will depend on the pension fund having a surplus. In case of the scheme having a deficit, the bonuses are put on hold.
We believe, at this time, that protecting current bonus pensions for the life of the scheme would be of very significant value to members
Mineworkers Pension Scheme trustee
Under the trustees’ new proposals, for the average weekly pension of £65 the £19 bonus pension could never be reduced and would always be paid in the future.
In July, the trustees said: “Since 1994 there have been five surpluses and three deficits at the three-yearly valuations, so unfortunately a loss or reduction of bonus pensions is a realistic possibility.
“For these reasons, we believe, at this time, that protecting current bonus pensions for the life of the scheme would be of very significant value to members.”
Work in progress
The implementation of the proposals will now commence, with BEIS officials having been instructed to work with the trustees in this matter.
Both parties will formulate the detailed changes necessary to the scheme’s rules to protect members’ bonus pensions, the trustees stated in an update on the scheme’s website.
However, due to the complex nature of the scheme’s rules, this may take some time to complete, they noted.
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The government will not make changes to the current surplus rules, which see the government pocket half of excess funds in return for acting as a guarantor of the pension scheme.
The MPS currently has more than 152,000 members, of which 135,000 are pensioners and the rest are deferred.
