09:30 11 July 2013
UK Coal has entered into administration and stuck a complex deal with the government.
The two sets of administrators together with the Pension Protection Fund (PPF) were able to work out a deal to save 2,000 jobs largely at two of the mining group’s three deep pits. The bad news though is that the miners’ pension was hit in the process.
It is understood that under the pension deal, the scheme will be taken over by the PPF. The mining companies will make regular payments to the PPF, and reportedly about 3,756 pensioners will not get affected in terms of pension entitlement.
However, it is understood that about 2,077 deferred members and around 971 active members will see a 10per cent reduction in their entitlement.
PPF executive director for financial risk Martin Clarke commented: “It means that pensions have been protected, the company can continue trading as a going concern and that 2,000 jobs have been saved from an uncertain future.”