§ 18. Mr. IllsleyTo ask the Secretary of State for Trade and Industry if she will make a statement on the Government's entitlement to half of the surplus of the mineworkers' pension scheme. [25565]
§ Mr. WilsonI am pleased to announce a new, additional benefit for members of the mineworkers' pension scheme on the lowest incomes, at a cost of £90 million. This will be funded out of the Government's share of the scheme's reserves.
The package will help mineworkers' pension scheme members who have only very modest miners' pensions, despite many years of service to the industry before 1975. Help for that particular group was identified as a priority in discussions with the scheme's trustees. Now, thanks to gains in the scheme's value under the Government's guarantee, the Government and Trustees have agreed a package of benefits, which includes special one-off payments for up to 66,000 of these members, alongside the 9 per cent. bonus for all members agreed earlier this year.
These lump sum payments will apply to members with at least five years service who left British Coal before or shortly after 1975 and who are on low pensions, defined on a sliding scale from not more than £5 a week after five years' service to not more than £10 a week after 10 or more years' service. The amounts they will receive will depend on their length of pensionable service and the current value of their pensions. Those with the longest service and the lowest pensions will receive the most. Payments, will range between £200 (e.g. for someone with, five years' service on £4 to £5 a week, or with 10 years' service on £9 to £10 a week) and £2,000 (for someone with 10 or more years' service on less than £1 a week). Details will appear in the next edition of the mineworker's pension scheme newsletter.
Members will not need to claim the money—most of those eligible, including all the existing pensioners, are expected to be paid in May, with the remainder paid within the next 18 months.
The Government and the Trustees of the two former British Coal pension schemes, the mineworkers' pension scheme and the British Coal staff superannuation scheme, have also agreed a joint statement agreeing a review of arrangements for the Government's guarantee of members' basic pension benefits. The text of that statement is as follows:
In 1994, when British Coal was privatised, the Government agreed to guarantee benefits already built up in the Corporation's pension schemes. These arrangements have served the members of the schemes very well, providing the basis for average pension increases of some 30 per cent. since 1994. Without the Government's guarantee, these closed schemes would have had to pursue entirely different investment strategies, based primarily on holding bonds, and would not have been able to pay anything like these increases.However, both the Government and the Trustees recognise that there have been changes in circumstances since 1994. They have therefore agreed to explore how these changes might best be reflected in revisions to the 1994 arrangements which would 418W benefit members. In doing so, they recognise that any revisions will need to be based on an equitable sharing of risks and reward between the schemes and the Exchequer, and will need to be sufficiently robust to operate satisfactorily in a wide variety of conditions.
§ Mr. ToddTo ask the Secretary of State for Trade and Industry what recent representations she has received on the Government's share of Coal Industry Pension Fund surpluses. [25567]
§ Mr. WilsonI have received seven representations on this issue over the last two months.