Scheme History

The Scheme was established in 1952. Contributions were paid voluntarily on a flat-rate basis, with members paying no more than 20p a week. Membership became compulsory in 1961.

MPS became a final salary scheme, with contributions increasing to 5% of pensionable earnings, matched by British Coal. This allowed for more generous pensions to be paid in retirement.

The Scheme closed to contributions following privatisation. British Coal stepped down as sponsor, and the government became Guarantor for the Scheme. 

The Government Guarantee says that members will always receive the pension entitlements they earned up to the time British Coal was privatised. So, if ever there isn’t enough money in the Scheme to pay members’ pensions, the government will make up the difference.

Today, MPS is one of the 20 largest pension schemes in the UK. Over the years, the Government Guarantee has allowed the trustees to invest the Scheme’s money more ambitiously than they would otherwise have been able to. This has paid off and the Scheme’s investments have made a surplus on several occasions. Whenever this has happened, the trustees at the time have used the members’ half of the surplus to put money straight into members’ pockets in the form of bonus pensions.