Select committee: Business, Innovation, Science and Trade Committee
Conclusion 7
Sixth Report - Mineworkers’ Pension Scheme
Published 29 Apr 2021
Paragraph 46
Addressed to Department for Business and Trade
Business, Innovation, Science and Trade Committee Mineworkers' Pension Scheme All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
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.
From: Business, Innovation, Science and Trade Committee, Sixth Report - Mineworkers’ Pension Scheme (HC 1346), paragraph 46, 29 April 2021
Government response
The government responded to the whole report on 5 July 2021 (deadline 29 June 2021).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government states it is "unable to agree to the Committee's recommendations" and continues to believe the 1994 arrangement "was fair and beneficial to both Scheme members and taxpayers".
- It does not accept that it has benefitted unduly, saying the arrangements "have been a success and benefitted all parties".
- It does not accept that the Trustees had no choice in 1994, noting they "could have declined the offer of the guarantee at that time".
- On changing the terms, it says BEIS Ministers "would be happy to have that discussion" if the Trustees want to leave the guarantee arrangements, but notes the Trustees have indicated the guarantee is worth more than the share of surpluses.
- It is "happy to consider ways to improve benefits", but says this "has to be weighed against the risks to taxpayers". It states that receipts go to the Exchequer and were never intended to be ringfenced for members or coalfield communities.