The trustees of the £8bn British Coal Staff Superannuation Scheme (BCSSS) are to meet with the government’s minister for industry next month to discuss options for using the pension fund’s surplus to make further payments to members.
Following an announcement by chancellor Rachel Reeves in November’s Budget, the government has promised to transfer a £2.3bn investment reserve to the control of the scheme’s trustees for distribution to members.
The move is expected to grant members of the scheme a “bonus pension” equal to 41% of their regular pension and backdated to 1 November 2024.
Since the Budget announcement, the BCSSS trustees have met with Chris McDonald, the minister for industry, to discuss changes to the scheme rules that would allow the trustees greater control over how any surplus is used in the future.
At a previous meeting in February, they proposed that rules be introduced or amended to allow for “clear valuations” that indicate the surplus or deficit position of the scheme, as well as to allow trustees to use 100% of any surplus to boost pension payments. The trustees have also asked for powers to distribute any surplus “when it arises, rather than waiting for the next three-yearly valuation”.
The trustees will put these requests to the minister at a meeting during the week of 11 May, according to a notice on the scheme’s website.
The BCSSS, like its sister fund the £10.5bn Mineworkers’ Pension Scheme, has a government guarantee. In her first Budget as chancellor in 2024, Rachel Reeves announced the return of this scheme’s reserve fund to members.
The trustees of the mineworkers’ scheme are also in discussions with MPs about changes to its rules similar to those put forward by the BCSSS trustees.
These proposed changes would also mean that the uplift to pension payments resulting from its investment reserve cannot be reversed. Mineworkers’ Pension Scheme members received a bonus last year equivalent to 32% of the average guaranteed pension.
