Letter: A pension success story for miners

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Sir: It would assist readers of the article, 'NUM takes action to recover pounds 800m for pension fund' (2 March), if they were aware of the facts behind what is a major success story for mineworkers and their pensions.

For many years, the Mineworkers' Pension Scheme (MPS) was in deficit. During those years, British Coal paid pounds 800m in extra contributions to make sure that pensioners did not suffer a serious drop in benefits.

More recently, the MPS has enjoyed two surpluses. More than pounds 1,700m (70 per cent of the total surplus) has been used to make dramatic improvements in pension benefits, including a reduction in the pension age, improving the rate at which pension is earned; special increases of 5 and 8 per cent in addition to RPI increases for pensioners; and a 25 per cent 'service credit' for members. The balance was awarded to British Coal for a 'contributions holiday' - if only that were totally true.

British Coal is justifiably proud of the improvements in the pension benefits for mineworkers. They have been introduced at no cost to MPS members. But someone has had to foot the bill. The fact is that almost all the improvements were possible only because British Coal increased its contribution rate from 5.25 per cent to 9.75 per cent of members' earnings, effectively utilising the vast bulk of the latest surplus awarded to the corporation.

In other words, mineworkers and their families will obtain maximum benefit from the pension scheme in that surplus funds have been ploughed into maintaining and improving benefits.

Yours faithfully,


Employee Relations Director

British Coal Corporation

London, SW1