UK Coal to Close Defined Benefit Scheme
Britain's biggest coal mining company, UK Coal, has confirmed that it will close its defined benefit pension schemes to future accrual of benefits. The company operates three mines in the Midlands and Yorkshire.
The defined benefit schemes were set up on the privatisation of the mining firm in 1994 replacing the old Mineworkers Pension Scheme (MPS) with two new schemes - The Industry Wide Coal Staff Superannuation Scheme ("IWCSSS") and The Industry Wide Mineworkers' Pension Scheme ("IWMPS"). The schemes had previously closed to new members with new employees joining a defined contribution (DC) scheme instead. Approximately 1,200 of the 2,800 staff employed are still in the DB schemes, with the remaining employees in the DC scheme.
UK Coal revealed in its annual report and accounts, published last week, that the deficit for its two funded defined benefit schemes stood at £171.6m. UK Coal Finance director David Bocksam said the company would begin an official consultation in the coming months and also added: "Our focus is to come up with a structure to allow the deficit to be funded, and moving to a lower cost defined contribution scheme would do that".