The following article talks of the steelworkers of ASW which went bust before we had a PPF and whose pension scheme never properly paid out to them. This is their complaint published in “nation cymru“.
It is time that money built up in the hard times should be spent in the good times. Our Pension Protection Fund has got the capacity behind proper increases to those who have been shortchanged for more than a quarter of a century.
What is happening in January is a start but it should not be the end for those like John Benson ageing as they are.
Steelworkers robbed of their pensions say UK Government help falls short
Martin Shipton
The UK Government has claimed that retired steelworkers who have campaigned for nearly 25 years to get their full pensions restored are better off as a result of recent changes.
But representatives of the pensioners say they will continue their battle for full compensation.
But that turned out not to be the case, and they are still campaigning for all their pensions to be fully indexed to inflation – a concession that successive governments have not been prepared to make.
The campaigners have now written to new Welsh Secretary Stephen Kinnock asking him to finally deliver them justice.
Many other pensioners whose employers went bust have also been disadvantaged, although they have been partially compensated through membership of the Pension Protection Fund (PPF) and Financial Assistance Scheme (FAS).
“We understand the impact that this has had on members and we have strengthened the safety net that the pension compensation system offers, so that it works harder for members following their employer’s insolvency.
“Legislation in the Pension Schemes Act 2026 introduces increases on Financial Assistance Scheme payments based on pensions built up before 6 April 1997 which will ensure AWS workers are eligible for an uplift.”
According to the DWP, this step change going forward will make a meaningful difference to over 300,000 PPF and FAS members, with average uplift of around £80 in the first year, and some pensioners seeing an increase of up to £340 more.
“The PPF is responsible for implementing these increases for its members, and for FAS members.
“We expect that the legislation will be brought into force in time for the first pre-1997 increases to be made to most members from January 2027.
“Increases will be CPI-linked (capped at 2.5%) and apply prospectively (ie to payments going forward) for members whose former schemes provided for these increases.”
A Wales Office spokesperson said:
“The Secretary of State has received the letter and will respond in due course.”
‘Safeguards’
Prominent ASW campaigner John Benson responded:
“What Labour are not telling the country regarding our appalling pension miscarriage of justice is that this was of successive UK governments’ own making. There was a failure to put in place safeguards after the Robert Maxwell Daily Mirror pension scandal [which came to light after Maxwell’s death in 1991 and showed that he had looted £460m from the Mirror’s pension fund] and Gordon Brown’s unfair tax on occupational pensions between 1997 to 2010 [which netted £238bn for the Treasury]. These indefensible actions destroyed the finest occupational pension system in Western Europe.
“Days before the general election in 1983, Stephen Kinnock’s father Neil Kinnock gave a speech in Bridgend in which he warned: ‘If Margaret Thatcher is re-elected on Thursday … I warn you not to grow old.
Now the former workforce at ASW Cardiff and all those innocent victims in the FAS are telling the country not to grow old under a Labour government if you have an occupational pension.”
Let’s hope that the surplus is not subject to a 40% tax charge like DC surplus
Then it’s a pity that this corrupt government gave an entirely unmerited gift of taxpayers’ money to the mineworkers. Because you can’t spend the same money twice.
The money added to members’ benefits (£1.5 billion from the Mineworkers’ Pension Scheme and £2.3 billion from the British Coal Staff Superannuation Scheme) came directly from investment reserve funds and surplus cash generated by the pension funds’ own assets since 1994, not from a “gift of taxpayers’ money”.
In the 30 years since privatisation, HM Government has received approximately £7.9 billion from the schemes’ surpluses without needing to contribute taxpayer money.
But HMG’s receiving that money was consistent with the deal struck at the time. HMG’s agreeing to forgo money it is owed is indeed a gift of taxpayers’ money and no amount of accountancy sleight of hand can disguise the fact – as will become all too clear at some point in the future when the two pension schemes get in trouble and beg for a handout at taxpayers’ expense.
I have to declare an interest, having served for four years between 2004 and 2008 as the last UK government appointment to the mineworkers’ scheme made by the then Department of Trade and Industry. Responsibility for subsequent appointments passed to the trustee board.
UK government did not expect or forecast a specific value as high as nearly £7.9 billion when establishing the 50:50 surplus-sharing arrangement during the 1994 privatisation of British Coal.
Parliamentary reports and select committee findings have noted that the 1994 arrangements and the 50:50 split were set up arbitrarily without detailed long-term actuarial forecasting or due diligence on how large the surpluses might eventually grow.
For further background
commonslibrary.parliament.uk/research-briefings/sn01189/
The surpluses ultimately surpassed initial expectations because the schemes’ investments performed much better than anticipated over the following three decades. No UK Government contributions have been required since privatisation.
The schemes’ actuary continues to be the Government Actuary’s Department.
Remember we are talking about schemes which were closed in 1994, which means they operate for existing pensioners and deferred members at that time. The survivors and their dependants are not getting any younger.
I would suggest in agreeing to waive the remainder of any mineworkers’ scheme surplus-sharing, which was due to end in 2029 as a backstop anyway, UK government has acted as an exemplar among sponsors of occupational pensions.
Private sector employers such as BP, Goldman Sachs, Hewlett Packard, Nissan, Shell, and others, have been criticised for capping annual increases or withholding discretionary adjustments.
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