The chancellor confirmed the full transfer of the remaining scheme surplus to members (iStock.com/dannyfroese)
The chancellor has confirmed “every penny” of remaining surplus in the Mineworkers’ Pension Scheme (MPS) will be paid back to members.
In his Autumn Budget speech to the House of Commons today (28 October), John Healey committed the government to the "full transfer of the Guarantor's Fund", believed to be worth some £1.2bn, to scheme beneficiaries.
He said: "For ex-mine workers, I'm guaranteeing that every penny of the pension fund surplus now goes to miners. I know the job's not done, and I will go on to ensure the full transfer of the guarantors' fund."
The Budget document published after the chancellor's speech said that the government was ending the surplus sharing arrangements in the MPS and British Coal Staff Superannuation Scheme (BCSSS), so that "the members receive 100% of the surpluses generated from the schemes' performance. The government will work with the trustees toward full transfer of the remaining Guarantor's Fund."
The announcement comes after reports that the government no longer planned to pay back the entire surplus, instead renegotiating the 50-50 surplus sharing arrangement, as pledged in previous budgets.
This provoked anger among MPs in former mining constituencies, according to a report from PoliticsHome, who made last minute representations to Number 10 yesterday.
The Conservative government took on the scheme as guarantor following the privatisation of British Coal in 1994, implementing a 50-50 surplus-sharing arrangement while the scheme ran on.
Labour's 2024 election manifesto committed to reviewing this arrangement and at the Autumn Budget that year, then- chancellor Rachel Reeves transferred the scheme's £1.5bn Investment Reserve Fund to the trustees. As a result, member benefits were augmented, with an average pension increase of 32%.
An equivalent £2.3bn was also transferred from the BCSSS leading to a 41% increase in pension incomes last December, backdated to November 2024.
There are now some 40,000 members in the BCSSS and around 110,000 in the MPS.
The government's new pledge came in a Budget speech that included little mention of the pensions industry. Confirmed measures included a rise in the tax-free allowance, to avoid pensioners dependent on the state pension being dragged into paying income tax when it rises above £12,750.
