On the go: The Mineworkers’ Pension Scheme has announced pension increases aligned with the retail price index for 2022 and 2023, currently running at 11.8 per cent.
The scheme trustees and Labour MP Stephanie Peacock met with business, energy and clean growth minister Greg Hands to discuss the impact high inflation would have on MPS members.
Peacock argued that previous to the new arrangement, scheme members would receive a 4 per cent increase this autumn.
The trustees proposed that the government should introduce the previously agreed changes to project bonus pensions into place immediately, rather than the assigned time frame of 2024.
The government agreed to the trustees request, leading to all members receiving an increase to their total pension equivalent to a full RPI hike on their guaranteed pension, which stands at 11.8 per cent.
Peacock said in a blog post: “During a cost of living crisis where every penny counts, I am delighted that ex-miners will now receive payments that are protected against inflation.”
She added: “This change, which comes at no cost to the government, will be funded by the current members’ surplus.”
The MPS said all members will receive an individual letter, detailing how their pension has increased, closer to the 2022 pension increase date of September 26.
Over the years, there have been repeated calls for the government to share the scheme surplus with its members, a request supported by the Business, Energy and Industrial Strategy Committee in May 2021.
Since the scheme’s original sponsor, British Coal, was privatised in 1994, the government has had an arrangement with the plan whereby it guarantees that the value of mineworkers’ pensions will not decrease, in return for the government taking 50 per cent of any surplus recorded by the scheme.
However, since that arrangement was agreed, the government has received £4.4bn from the scheme. It was due to receive another £1.9bn in 2021, as well as 50 per cent of any future surplus, but it has yet to pay a single penny into the scheme itself.
The government has in the past argued that its guarantorship has enabled the MPS to pursue its successful investment strategy.
