I read this tweet and for a moment thought that I was agreeing , but then I read a little further and decided I was not sure…

Did you notice £2.3bn giveaway in Budget to small group of public sector pensioners? Another transfer from young to old.

After years of companies pouring hundreds of billions into DB pensions the companies, not pensioners, should benefit from surpluses. https://t.co/W8dEg3l86C

— Paul Johnson (@PJTheEconomist) February 16, 2026

What is this £2.3bn giveaway? It is money paid to those in the mineworker’s scheme.

You will almost certainly not have noticed that in the last budget, the chancellor allocated a windfall of some £2.3 billion. And how did she decide to spend it? On dramatically enhancing the pensions of around 40,000 public sector pensioners, many — if not most — of whom are already pretty well off.

I should explain. Annex B of the budget red book is entitled “Delivering in Scotland, Wales and Northern Ireland”. For some reason, the announcement to which I am referring, despite being a UK-wide policy, is hidden away under the Welsh bit of that annex. Here we find the following statement: “The government will also transfer the Investment Reserve Fund in the British Coal Staff Superannuation Scheme (BCSSS) to the scheme’s trustees. This will be paid out as an additional pension to members of the scheme.” This is enough to enhance their pensions by 41 per cent, and pay a hefty backdated lump sum. What an amazing windfall for these fortunate few.

Why was there a surplus in the mineworker’s scheme? Well Paul doesn’t explain this, but the fact is that the Mineworker’s scheme was invested in equities (almost entirely) and that has generated (under Mark Walker) a massive surplus. This is now being paid to a second group of pensioners, not the coalface workers but those who managed the coal business and the engineers who kept the mines working.

Sorry Paul but without these workers there would have been no mining company in the UK, some of this second group of mineworkers are already doing well  but to call them “public sector pensioners” is misleading. They did not appear in Yes Minister in 1970s suits, they were the company as much as the miners. Johnson goes on to explain that the mineworker’s scheme has been invested for growth but he thinks that the surplus deserves to be in the hands of the tax-payer who effectively guaranteed the pensions as the equivalent of the sponsoring employer.

You may be thinking, fair enough, this is a pension scheme and it is the pensioners’ money. They paid their contributions, so they should get any upside. But the whole point of these defined-benefit schemes is that they offer a guaranteed pension which is enormously valuable in itself.

In normal cases the employer will make up the difference if there is a deficit and, in active schemes, will take the upside in the form of lower contributions when there is a surplus. In this case the taxpayer was on the hook as guarantor, effectively in place of the employer.

The pensioners are getting the valuable pension which they were promised. There is no good reason to distribute the surplus to them. This is just another example of the British state as a machine for moving money from younger generations to older ones.

I ask my readers to consider the word “company” and of a “company pension”. The company is the people who works for it and it distributes the money it makes to its workers and those who own it. The money it pays into the pension scheme is not a handy wealth scheme for the shareholders or in this case the tax-payers.

What is different about the miners is that there is no new generation of them who could get the surplus paid into a DC or CDC pension. That is because mining is considered toxic both to the miners and to the planet , we don’t do mining anymore (well like we did).

So the only people who can get money from the pension scheme should be the fast diminishing group of (mainly) men who are still pensioners. The tax-payer does not have a right to this money.

I can think of many DB schemes in the private sector where there are younger people to whom the surplus of a DB scheme can be paid. I can think of their schemes , 75% of which are in surplus. I hope that as well as making good shortfalls in DB schemes (increases for work pre-1997 for instance), these schemes can be used to improve pensions for younger people in DC and in CDC schemes. That cannot be done for mineworkers but it can be done for millions of workers who need more income in retirement.

To Paul Johnson’s demand that this surplus money is paid to employers, let me point out that if the surplus is paid into young people’s pensions and invested in older people’s pensions then the money can be kept in UK companies  and used to power growth in the economy. That of course involves stopping pumping the money into offshore insurance and stopping pouring money in DC plans into overseas companies (only 4% of Nest’s money was invested recently in the UK – I know that is changing and that is good).

I think we can get surpluses priming our economy through investment. The Stagecoach/Aberdeen transaction is an example of how, more can be done with superfunds and more can be done with CDC and guided retirement in DC.

To suppose that the surpluses of British pensions should be, as Paul Johnson supposes they should be, returned to employers is to defeat the point of pensions and their value to the people who are our great companies.