Recommendations & Conclusions
8 items
1
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Rejected
The Scheme’s Trustees had little choice but to accept the Government’s proposal to divide future surpluses on a 50:50 basis, as a condition of securing the Government’s guarantee during the negotiations in 1994.
Government response AI summary
The government rejects the committee's conclusion, stating that the Trustees did have a choice regarding the 1994 proposal and could have declined the guarantee. It maintains that the 1994 arrangement was fair and beneficial to both Scheme members and taxpayers.
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Department for Business and Trade
2
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Rejected
The Government failed to conduct due diligence during the 1994 negotiations and undertook no empirical analysis or evaluation to inform or support the 50:50 split it proposed. The Government was negligent not to take actuarial advice.
Government response AI summary
The government rejects the conclusion, asserting that the Trustees had a choice in 1994 and that the agreed arrangement was fair and beneficial due to the government taking on all the risk.
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Department for Business and Trade
3
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Rejected
The 50:50 split was, and remains, arbitrary.
Government response AI summary
The government rejected the conclusion, asserting that the Trustees had a choice in 1994 and reiterating its belief that the 50:50 arrangement was fair and beneficial to both scheme members and taxpayers.
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Department for Business and Trade
4
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Rejected
To date, the Government has received £4.4bn from the Mineworkers’ Pension Scheme. This is already more than the 1994 expectations of what the Government would receive. The Government is also due to receive at least another £1.9bn, on top of 50% off any future surpluses.
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To date, the Government has received £4.4bn from the Mineworkers’ Pension Scheme. This is already more than the 1994 expectations of what the Government would receive. The Government is also due to receive at least another £1.9bn, on top of 50% off any future surpluses.
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Government response AI summary
The government rejected the implied criticism of the Mineworkers’ Pension Scheme arrangement, arguing that the 1994 agreement was fair, beneficial to members and taxpayers, and that trustees had a choice to decline the offer and its associated guarantee.
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Department for Business and Trade
7
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Rejected
We recognise that the Government’s guarantee is important, has contributed to the success of the Scheme, and has benefitted Scheme members. However, we are not convinced by the Government’s argument that its entitlement to 50% of surpluses is proportionate to the relatively low degree of risk it actually faces in …
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We recognise that the Government’s guarantee is important, has contributed to the success of the Scheme, and has benefitted Scheme members. However, we are not convinced by the Government’s argument that its entitlement to 50% of surpluses is proportionate to the relatively low degree of risk it actually faces in practice. The number of Scheme members and the relative size of the fund has fallen significantly since 1994. Yet, the Government’s ‘price’ for the guarantee has not been adjusted to reflect that fact. With no formal period review mechanism built into the agreement, pension members remain tied to an expensive arrangement.
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Government response AI summary
The government explicitly rejects the committee's conclusion, stating it continues to believe the 1994 arrangement for sharing surpluses in the Mineworkers’ Pension Scheme is fair and beneficial because the government has taken on all the risk.
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Department for Business and Trade
14
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
Rejected
Whilst we have called for the 50:50 split to be replaced with a more appropriate arrangement moving forward, we believe pensioners should also receive a more immediate uplift. We recommend that the Government hands the £1.2bn it is due to receive from the Investment Reserve back to miners, and sets …
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Whilst we have called for the 50:50 split to be replaced with a more appropriate arrangement moving forward, we believe pensioners should also receive a more immediate uplift. We recommend that the Government hands the £1.2bn it is due to receive from the Investment Reserve back to miners, and sets out its proposals for how and when this will be administered in response to this report. (Paragraph 63) Conclusion
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Government response AI summary
The government rejected the recommendation to hand the £1.2bn Investment Reserve back to miners, but stated it is willing to explore with Trustees options for providing members with a lump sum payment within the existing framework.
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Department for Business and Trade
15
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Rejected
The Government’s guarantee has undoubtedly benefitted the Scheme’s members by providing vital security that the value of pensions will not decrease. However, the price of this guarantee is no longer fair. (Paragraph 64) Mineworkers’ Pension Scheme 25
Government response AI summary
The government rejected the conclusion, stating it continues to believe the 1994 arrangement was fair and beneficial to both scheme members and taxpayers, with the government bearing all the risk.
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Department for Business and Trade
17
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
Rejected
The Government must now accept its moral obligation to the Scheme members, and acknowledge that continuation of the surplus sharing arrangements in their current form robs beneficiaries of the financial security they have rightfully earned.
Government response AI summary
The government rejects the recommendation, stating it does not accept that it has unduly benefited from the surplus sharing arrangements, which it views as successful and beneficial to all parties.
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Department for Business and Trade