The Mineworkers pension scheme is in the news and for all the right reasons.
At the Labour Party Conference, Ed Milliband delivered the following promise to Mineworkers with Government backed pensions
Just as we will do right by today’s generations in our energy policy, so we will do right by past generations that powered our country.
Across Britain, hundreds of thousands went down the mines.
Too often they paid the price in ill health, and even with their lives. I know it from my own constituency.
We owe them the greatest debt.
But we know there is unfinished business.
The scandal of the mineworkers’ pension scheme.
And so this Labour government will honour the promise in our manifesto to finally deliver justice to mineworkers and their families.
The Labour Party Manifesto is specific
Labour will end the injustice of the Mineworkers’ Pension Scheme. We will review the unfair surplus arrangements and transfer the Investment Reserve Fund back to members, so that the mineworkers who powered our country receive a fairer pension.
In 2021, a cross-party parliamentary inquiry advised that the government should stop taking funds from the scheme and deliver a fair deal for miners.
Recommendations were rejected by the government and data released to the BBC in March 2024 showed that the government has received three annual payments of £142.4m since then.
Labour MPs including Rachel Reeves, Ed Miliband, Darren Jones, Yvette Cooper, and Stephanie Peacock have been involved in a long-running campaign “demanding a better deal for miners” alongside organisations such as the National Union of Mineworkers (NUM).
The investment reserve currently sits at £1.6 billion.
This change will increase the weekly pensions received by miners by at least £14 per week, as estimated by the select committee.
Mick Newton, a former Thoresby miner and campaigner, expressed his delight at the announcement, calling it a “massive step forward” for former mineworkers, widows, and mining communities.
He said: “May I take this opportunity to thank all those who have campaigned on this injustice and express our thanks to the Mansfield Chad for the support given to us over the years.
Three comments in support of the Government and the Miners
1, The surplus was generated by the investment of the fund in growth assets by Mark Walker and his investment team. I wrote about this earlier in the year. One has to wonder why other schemes with a crown guarantee behind them (notably BTPS) messes around with leveraged LDI when they could have invested their fund accordingly. The surplus is as a result of people taking positive decisions about how pensions are invested rather than relying on gilts and the so called “zero risk” option, I have written on this before,
2, Sharing the upside of a DB fund , at the discretion of sponsor and trustees , can and should include members. The question for the Government is whether they wish to distribute the surplus as a one off bonus cash distribution, as extra pension or through a private sector arrangement such as an annuity or third party DB scheme such as Pension SuperHaven
3, The Government have committed themselves to member choice, perhaps the choice of how the money is paid should be with the mineworkers.
Giving back
Both mineworker schemes entered a natural endgame with the end of coal. The prudence emerged as surplus.
Many will think that this surplus should be returned to the tax-payer but those who know former mineworkers will know the high price they paid for their work. Miners have shorter life-expectancies and their pension promise, like their career, was curtailed with the end of extraction in the UK.
Ed Miliband’s words speak meaningfully to this. If we are serious in improving people’s later lives through funded pensions, we should offer our support to Government and mineworkers at this time.
Sadly the offer will come too late for many mineworkers who have passed away before their time. I hope that spouses and other dependents will also benefit.