Miners transfer pension schemes (CORRECTED)
Saturday 18 December 1993
LOCAL officials of the National Union of Mineworkers are encouraging former miners to switch their benefits out of the Mineworkers' Pension Scheme, a leading insurance company claimed yesterday.
More than half a million people are caught up in the pension transfers debacle, of which 65,000 are miners leaving the MPS. Financial regulators believe many thousands of investors have lost money after being badly advised to move their benefits to a personal pension with a life insurer.
The insurer, which would not be named, said some NUM officials were angry and distrustful of British Coal and the Government, and feared for the future of the MPS, widely recognised as one of the best and most generous pension schemes.
A spokesman for the insurer said '(the NUM officials) talking to us and our reps are very keen to help their former colleagues get out of the Mineworkers' Pension Scheme because they feel it's tainted'.
This advice contradicts the NUM's official line, which strongly recommends miners should stay with the MPS. An NUM spokeswoman said: 'We have told scheme members not to risk this shark-infested ocean which seems to be lying out there in the world of personal pension schemes.'
Pearl Assurance, which has received more than pounds 60m from the MPS, said many miners were determined to leave the scheme. A spokesman said: 'We have had many cases where we have been saying it's simply not best advice, and they've said, 'I don't give a stuff, I want out'.'
Pearl said it accepts pension transfers that, objectively, are against the best interests of the client. Prudential Corporation said it turns down such business, irrespective of the client's emotional reasons for making the transfer.
Despite the bad publicity about pension transfers, Pearl is still seeking business from miners. Three or four of its salesmen were last weekend talking to miners who used to work at Frickley Colliery, South Yorkshire.
Meanwhile, other insurers are backing away from the pension transfers market. Royal Life will not accept transfers from 20 occupational schemes, including those for miners, teachers and the NHS. Legal & General is no longer accepting borderline cases and will only accept business that is 'obviously transferable'. L&G said: 'We are one step short of pulling out.'
An article last month, 'Miners transfer pension schemes', quoted an insurance company's claims that local officials of the National Union of Mineworkers were encouraging former miners to switch their benefits out of the Mineworkers' Pension Scheme. Later in the article there was a separate reference to Frickley Colliery, South Yorkshire. The Frickley branch of the NUM has asked us to say that it is not its policy to recommend such transfers.
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