Source · Select Committees · Business and Trade Committee
Recommendation 1
1
Rejected
Paragraph: 16
The Scheme’s Trustees had little choice but to accept the Government’s proposal to divide future...
Conclusion
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 summary AI-generated
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.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
16
Government Response
Rejected
HM Government · verbatim extract
Rejected
6. The Government does not accept that the Trustees had no choice about the Government proposal in 1994. We note that if the Trustees did not think the 50:50 offer was a reasonable one, they could have declined the offer of the guarantee at that time. BEIS Ministers would still be happy to discuss that option with them. Without the Government guarantee, Scheme members would have access to all surpluses. However, there are numerous examples of pension schemes that have been unable to meet their basic obligations, let alone increase pensions to the extent the MPS has under the current arrangements. The Government continues to believe that the arrangement agreed in 1994 was fair and beneficial to both Scheme members and taxpayers. Scheme members have rightly shared in the benefits but the Government has taken on all the risk.
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