26 April 2011
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".