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British Coal

Volume 410: debated on Friday 19 September 2003

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To ask the Secretary of State for Trade and Industry what pr ogress has been made in reviewing the arrangements for apportioning surpluses in the pension schemes for former employees of British Coal. [130371]

I am advised that the current arrangements represent a good deal for the pension scheme members. Their basic pensions are secure even in times when, as is now the case for the Mineworkers Pension Scheme, investment performance has produced a deficit. Under the terms of the Guarantee, that deficit will be met by a transfer of several hundred million pounds from the Investment Reserve, which represents Government's share of pre-privatisation surpluses in the Scheme, to the Guaranteed fund to pay members' guaranteed benefits. And despite the deficit, Government have agreed to a Trustee proposal allowing members of the MPS to continue to receive inflation linked increases to their total pension (i.e. basic pension plus bonus) over the next three years.The DTI Department has held discussions with the Trustees of the British Coal Staff Superannuation Scheme and the Mineworkers' Pension Scheme on the future of the Government Guarantee for those Schemes, including the division of surpluses.Following those discussions the trustees were advised that the Government do not consider it would be right to adjust the current surplus sharing arrangements. Some other changes to the Guarantee arrangements were agreed, as were further discussions to consider possible different methods of paying for the Guarantee

and also other ways of guaranteeing the bonuses that have already been awarded to members, while not representing a significant additional burden on the taxpayer