Background to the Scheme

Since the MPS was introduced, it has changed significantly in structure. This section summarises those changes, and sets out the calculation basis for MPS benefits. The benefits payable to Scheme members vary because each member’s circumstances are different.

The MPS came into effect on 1 January 1952. Membership was made compulsory from 3 April 1961.

Benefits earned before 6 April 1975 were relatively small and until April 1990, these benefits did not increase, either before or after they went into payment.

The benefit structure of the Scheme was significantly revised from 6 April 1975, when it became an earnings related, final salary scheme. After 6 April 1975, as contributions changed from a flat rate to an earnings related basis, the Scheme was able to provide better benefits than before as a result of the higher contribution level.

Refunds of contributions, paid as small lump sums, have been payable in certain circumstances – usually as a result of having relatively short service. Any member who was entitled to a refund of contributions was notified at the time of leaving the MPS. Where a refund was paid, no further benefits would be payable for that particular period of membership.

The following table shows eligibility for membership and contribution rates:

Date

Membership

MPS Contribution rate

1 January 1952 to 3 April 1961

Scheme membership was voluntary in most cases

Maximum of 7.5p per week

4 April 1961 to 6 April 1975

Scheme membership was compulsory

Maximum of 20p per week

7 April 1975 to 31 December 1978

Scheme membership was compulsory

5% of pensionable earnings

1 January 1979 to 5 April 1988

Scheme membership was compulsory

5.25% of pensionable earnings

6 April 1988

Scheme membership was no longer compulsory

5.25% of pensionable earnings

Following privatisation in 1994, the MPS was closed and no further payments of ongoing contributions were accepted. MPS contributors who continued to work in the coal industry after privatisation were able to transfer to the Industry Wide Mineworkers’ Pension Scheme (IWMPS) from January 1995.