A number of special terms are used in this website. They are necessary to enable the benefits provided by the Scheme to be described accurately. The following terms are used throughout this website and the meanings given below should be referred to wherever necessary.

Accrual Rate:

The rate at which pension earned after 6 April 1975 built up. The Accrual Rate used in the benefit calculation depends on the date a member left the Scheme.

Actuarial Valuation:

An investigation by an actuary into the ability of a pension scheme to meet its liabilities. This is usually to assess the funding level and a recommended contribution rate based on comparing the actuarial value of assets and the actuarial liability.


An adviser who calculates the value of the Scheme’s total pension liabilities by analysing current membership, the economic outlook and long-term demographic trends to determine whether the Scheme is in surplus or deficit. The Actuary for the MPS is the Government Actuary.

Additional Voluntary Contributions (AVCs):

Contributions over and above a member’s normal contributions, which the member elects to pay to the scheme in order to secure additional benefits.

Bonus Augmentations:

Benefit improvements from valuation surpluses arising from valuations undertaken after October 1994. Bonus Augmentations are not fully guaranteed by the Government.

Bonus Augmentation Fund:

The sub-fund which holds members’ 50% share of surpluses.


Includes a posthumous child, stepchild, a child whom he has legally adopted and a child for whose care and maintenance the member was, in the opinion of the Trustees, responsible at the relevant date.

Committee of Management:

The Committee of Management or the Board of Directors of the Trustee.


The exchange of a part, or all, of the pension due for an immediate lump sum.

Contributing service:

The total of a member’s total Scheme service after 6 April 1975, plus any service transferred into the Scheme from another pension scheme, and any additional service credit due following the 1992 and 1994 valuations of the Scheme, but excluding any period of strike absence for which Scheme contributions were not repaid.

Deferred Pensioner:

A person entitled to benefits from the Scheme which are not already in payment.


Where the Scheme’s assets are insufficient to pay the pensions benefits due to members during the remaining lifetime of the Scheme.


Any person to whose maintenance the member contributed financially at the relevant date.


An order of the Court when a member of an occupational pension scheme or personal pension scheme divorces, directing the trustees or managers to pay some or all of the member’s benefits to the ex-spouse at the time they become payable to the member.

Guaranteed Fund:

The sub-fund which contains the assets necessary to pay all of the Guaranteed liabilities, which are the benefits earned by members during their employment with British Coal and the annual RPI increase on these benefits, ie all benefits except Bonus Augmentations.

Guaranteed benefits:

Scheme benefits which are fully covered by the Government guarantee.

Guaranteed Minimum Pension:

An amount broadly equivalent to the entitlement to the pension from the State Earnings Related Pension Scheme (SERPS) which members would have earned during their years of contributing service had they not been contracted out of the State Scheme.


At the date of privatisation, the Secretary of State for Trade and Industry. In 2007, the DTI was replaced by the Department for Business, Enterprise and Regulatory Reform (BERR). In October 2008, responsibility passed to The Department of Energy and Climate Change. (DECC).

Guarantor’s Fund:

The sub-fund which holds the Guarantor’s 50% share of surpluses.

Internal Dispute Resolution (IDR) procedure:

A formal complaint procedure which gives Scheme beneficiaries a route to pursue a complaint that they have not been able to resolve with the administrators of the Scheme.

Investment Reserve:

The balance of British Coal’s share of surplus from valuations before 1994 which is available as a first call to meet a deficiency in the Guaranteed Fund. Any balance not used for this purpose is payable to the Government over a period of not less than 25 years from 31 October 1994.


The Industry Wide Mineworkers’ Pension Scheme, the Scheme which MPS contributors who continued to work in the coal industry after privatisation were able to join as of right.


Amounts which the Scheme has an obligation to pay now or in the future.

Lifetime allowance:

The maximum amount of pension savings that any one individual can build up. The allowance applies to the total benefit value of all registered schemes, not just the MPS, at the time benefits are put into payment. In the tax year 2010/11, the Lifetime Allowance is £1.8 million.

Pension Sharing:

The splitting of a member’s benefits under a pension scheme between the member and the divorced spouse, either within the scheme or by means of a transfer payment.

Pensionable age:

The age at which full benefits become payable to former MPS members. Since 1 March 1992, in respect of both male and female members, the Scheme’s pensionable age has been 60.

Pensionable salary:

The amount of a Scheme member’s earnings used to calculate his or her pension entitlement at the date of leaving service, in accordance with the provisions of the Rules of the Scheme at that date.

Reducing bonus:

Following a shortfall in the Scheme, bonuses awarded at valuations before 22 September 2003 start to reduce. These are called “Crystallised Augmentations” in the Scheme Rules.

Retail Prices Index (RPI):

An index used by Government to measure the average change from month to month in the prices of goods and services purchased in the UK.

Special Bonus:

The increase made to Guaranteed benefits in autumn 2003.

Standstill Guarantee:

An agreement with Government meaning that in addition to the protection of the 1994 pension level and the guarantee of index linking on that amount, the level of pension, plus bonuses, will never reduce in cash terms.

State Earnings Related Pension Scheme (SERPS):

The additional earnings based component of the State pension scheme, which ran from 6 April 1978 to 5 April 2002.

State Second Pension:

The additional pension provisions of the State pension scheme, introduced from 6 April 2002 to replace SERPS.