The Mineworkers Pension Scheme
The Mineworkers Pension Scheme (MPS), like many other defined benefit final salary pension schemes, offers many valuable benefits and guarantees. It is an extremely well-funded scheme – a 2017 valuation showed it had a surplus of more than £1.2 billion. Indeed, since the privatisation of British Coal, the scheme is believed to have paid up to £3.5 billion in funds back to the U.K. Treasury.
Currently, the MPS has around 200,000 members while the British Coal Staff Superannuation Scheme (BCSSS) has approximately 57,000 members.
However, despite their many benefits, a huge number of members of defined benefit pension schemes were wrongly persuaded to move elsewhere during the late 1980s and early 1990s – it’s estimated 5 million pensions were sold during these years alone.
The Pension Review operated from 1993 until March 2000 and should have resulted in the investigation of around 1.5 to 2 million pension transfers. If advice was found to be flawed, compensation should have been given. Those newly retired or approaching retirement headed the queue, with reviews for younger pension holders taking place much further down the line.
Unfortunately, for a variety of reasons, not every defined benefit pension transfer made from April 1988 to the early 90s was investigated. Those who missed out may now be entitled to substantial compensation.
The UK’s first financial scandal
In 1988, the personal pension provisions of the Social Security Act 1986 came into force. For the first time, employees were allowed to save for retirement themselves instead joining an occupational pension scheme provided by an employer. April 1988 also saw the introduction of the Financial Service Act 1986 – the first set of regulations for the UK’s financial service industry.
By 1992, it was already apparent that many people had bought a personal pension when it was likely to have been to their disadvantage. Poor advice came from a number of sources.
Firstly, many insurance companies gave out faulty advice to their customers – Abbey Life, Co-op Ins, Confederation Life Legal & General, Pearl, Prudential and Sun Life of Canada had a raft of direct sales teams.
Agents worked hard to form strong personal relationships with their “book” of a few hundred customers, often becoming considered as family friends. They were in charge of managing their customers’ financial arrangements, from savings plans and life insurance to collecting premiums each week. Unfortunately, many were quick to misinform former mineworkers that their pensions were poorly performing, with some even holding meetings in colliery canteens or cold-calling former miners at home to spread their message.
Independent Financial Advisors (IFAs) were also heavily involved. Although many now claim they had no need to retain transfer paperwork and advice had been given in good faith based on regulations applying at that time.
Banks similarly came looking for a slice of the action as they were often the first to know if miners had moved on. Target driven sales saw many, including Lloyds, handed heavy fines – as far back as 1995 Lloyds provisioned £165 million to cover for compensation payments
All in all, the mis-selling of pensions transfers to MPS members led to a reported industry cost of £11 billion, not to mention the direct impact it had on scheme members.
Are you a former MPS member?
If you moved your pension out of the MPS in the late 1980s or early 1990s and the transfer was not investigated as part of the Pension Review between 1993 and 2000, you may be entitled to compensation and Beat the Banks can help you claim it.
Our team of financial experts will analyse your case to establish if you have grounds to make a claim and then guide you through the claims processes. Call us on 0800 193 1234 to find out what we can do for you.