UK Coal restructure impacts pensions

UK Coal’s pension schemes have taken the majority share in the organisation’s property business following a restructure.

The restructure, which began in March 2012, split UK Coal into separate mining and property businesses. The mining business will continue as employer sponsor of the pension schemes. In return for giving up any potential claim against the property business, the two schemes have a 75% shareholding in the new property business, Harworth Estates.

The schemes, the industry-wide Mineworkers’ Pension Scheme and the industry-wide Coal Staff Superannuation Scheme, which have 6,800 members, have also injected £30 million of capital into Harworth Estates to ensure they have the necessary funds to develop the properties and achieve value for pension scheme members.

Global consultancy firm Aon Hewitt advised UK Coal on the restructure.

Donald Duval, partner at Aon Hewitt and actuary to the pension schemes, said: “The split of the business, with the pension schemes taking the majority share in the property business, is an innovative solution to the problem of funding the pension schemes while allowing the companies to invest in the business.

“This is an excellent outcome for the business, the trustees and the members, particularly as the alternative might well have been the schemes entering the Pension Protection Fund, which would have meant much-reduced benefits for the members.”