UK - Thousands of mineworkers look set to lose their pension bonuses in the wake of the Mineworkers Pension Scheme's triennial valuation.
Scheme members are rallying the government to commit to any funding shortfall, in fear that falling stock markets will have wiped any surplus from the £10bn fund.
But the government – which is guarantor to the fund – has said that it will not put its hand in its pocket until all other avenues are exhausted.
MPS chief executive David Morgan explained that it is unlikely the government will have to pay any additional cash because of the “unique nature” of the MPS scheme and its “preservation technique for surplus”.
Instead, any shortfall in the scheme will be met through channelling funds from the mineworker’s Benefit Augmentation Fund – set up when the industry was privatised in 1994 as a way to convert scheme surplus into pensions bonuses for scheme members.
But it is expected that falls in the value of the MPS will drain the Benefit Augmentation Fund and thousands of mineworkers will be left out of pocket as a result.
Members of the MPS currently enjoy bonuses worth up to 30% of their core pension payment.
Morgan explained that reducing benefits is a far more likely scenario than calling on the government for additional funding. “Only if we exhausted these funds would we have to call on the government for cash, and we are certainly going to be nowhere near that at this stage.”
The results of an actuarial valuation of the MPS are due within weeks, and while Morgan said there will almost certainly be a deficit, there are no forecasts for the size.
In a statement to IPN’s sister publication, Professional Pensions, a department of trade and industry spokesman said: “When the sub-funds are exhausted, the guarantee will be called upon and new money provided to cover the guaranteed benefits.”
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