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<p>Since the privatisation of the British Coal Corporation in 1994, the Government
has provided a solvency guarantee to the Mineworkers’ Pension Scheme (MPS). That guarantee
provides members with the reassurance that their basic pension entitlements will always
rise in line with inflation and gives them the opportunity to share, with Government,
in the benefits of any periodic surplus in the Scheme funds. In practice, this has
meant that members enjoy bonus pensions worth almost 30% of their index-linked benefits.
The guarantee further provides that the combination of these two pension elements
will never fall in cash terms regardless of the performance of the funds.</p><p>The
Government continues to believe that the equitable division of surpluses between the
membership and Government represents fair and reasonable recompense for taxpayers’
past investment in the Schemes during the industry’s period of public ownership and
for the risks they continue to bear through the Government guarantee which will continue
till the closure of the scheme which Is not expected to be until the 2070s.</p>
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