Miners' pensions valuation
149. The Mineworkers' Pension Scheme and British
Coal Staff Superannuation Scheme together include £27bn of
assets and have 350,000 members between them.[179]
There is ongoing controversy concerning the valuation of these
pension schemes. The most recent GAD valuation, of 2005-06 identified
a £1.9bn surplus in these schemes. Under the terms of the
privatisation of British Coal, the surplus is subject to redistribution
to both members and the Government. Since 1997 it is reported
that the Government has received £3.5bn in cash.[180]
However the Government is the guarantor of these schemes and is
bound to repay funds required to satisfy the liabilities of the
scheme as they crystallise.
150. There are those, such as pensions consultant
John Ralfe, who contest the method of valuation used by GAD.[181]
They argue that if alternative valuation methods are employed
the scheme appears to be in deficit and thus represents a liability
for the British Taxpayer. As a relatively recent appointee, Mr
Llanwarne admitted that he had not been involved in the valuation
of the miners' pensions but he maintained that:
There is not one unique number as to what the surplus
is or not. What is critical about this pension scheme is that
the way in which the valuation is done is set out in specific
legislation relating to it as to what you do, how you calculate
the surplus and it is reasonable to do that because, unlike the
private sector, where it is absolutely critical that you get things
in balance between your assets and your liabilities, this one
has the underlying government guarantee which makes it quite different.
When someone asks whether the surplus is this or that, I will
say to you that if you do your calculation on one basis you get
that surplus, if you do your calculation on another basis you
might get another surplus or a deficit.[182]
151. We note the controversy
surrounding the valuation of miners' pensions and recommend that
the Government Actuary's Department issues a statement addressing
the risk of future liabilities being faced by the ultimate guarantor
of these schemes, the UK taxpayer.
Equitable Life
152. The Parliamentary and Health Service Ombudsman
issued her final report in July 2008[183]
which identified GAD as falling short of acceptable standards.
Her determinations in respect of GAD's actions appear in the table
below. Table
5: Extracted determinations of the Parliament and Health Service
Ombudsman
