Changes to the MPS that provide additional protection to members’ pensions

12 October 2020

The Scheme Chairman has written a letter to all members about changes made to the Scheme that provide additional protection to members’ pensions. All Scheme members will receive a copy of this letter through the post.

The opening message from the Chairman, which contains a summary of the main points of the letter, can be read below. A copy of the full letter can also be downloaded here.

You can listen to an audio version of the letter here.

 

Message from the Chairman

Dear Member,

I hope that you and your family are keeping safe and well during these difficult and very challenging times.

When I last wrote to you in June, I explained that the Trustees’ discussions with the Government about the protection of all current bonus pensions were progressing well and that I hoped to be able to communicate the outcome to you later in the year.

I am now delighted to be able to report, on behalf of my fellow Trustees, that these discussions have concluded and the changes to the Scheme’s rules, necessary to protect members’ current bonus pensions, have been agreed and implemented.

Whilst these changes will have no immediate impact on your pension they will, along with the bonuses provided following the last actuarial valuation in 2017, provide you with meaningful extra protection in the future, as summarised below:

  • Bonus pensions make up a substantial part of members’ pensions. For example, at the time of the last valuation, the average pension paid from the Scheme was around £84 per week, of which around £19 per week was bonus pension.
  • As previously confirmed, following the 2017 valuation new bonuses providing increases equivalent to 4.2% of your guaranteed pension have been and will continue to be paid in each year up to and including 2023.
  • Prior to the changes that have just been agreed, bonus pensions could then be lost or reduced if there was a deficit at an actuarial valuation in 2023 or after. In future, as a result of the changes, any bonus pensions in payment in 2023 can no longer be lost or reduced at subsequent actuarial valuations.
  • Surplus sharing is not affected by the changes. As a result, should there be a surplus at the 2023 or subsequent actuarial valuations, then new bonuses will be declared.

I hope that you’ll find the extra certainty of pension increases and longer-term protection of your bonuses reassuring, particularly during these challenging and uncertain times.

The rest of this letter includes more detail about the changes including further information about how and when they will impact your pension and the reasons why these changes are valuable to members.

Take care and stay safe.

Yours faithfully

Chris Cheetham
Chairman of Trustees
Mineworkers’ Pension Scheme

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