Some General Notes About The Scheme

Family Benefit Contributions

The payment of widows’, widowers’, civil partners’ pensions and children’s allowances is dependent on the contributor having paid family benefit contributions. Generally, only the period for which family benefit contributions were paid counts as reckonable service for these benefits. The provisions for the payment of family benefit contributions have changed substantially since the Scheme was established. The key provisions are:

• Male contributors have always had the right to pay for family benefits on joining the Scheme
• Payment of family benefit contributions was made compulsory for male contributors who were married and who joined the Scheme from 1952
• All male members were required to pay family benefit contributions from April 1978
• Female contributors were given the right to pay for family benefits from April 1980 (prior to this the right only existed where the spouse or children were fully dependent on the contributor)
• Facilities have been available for contributors to purchase extra years for family benefits for earlier service when family benefit contributions were not paid
• There was a contribution holiday for contributors from family benefit contributions from April 1993. Also from this date, all female contributors accrued family benefits.

Benefits on death - making your wishes known

Lump sum payments - Election and Declaration under Rule 28A

BCSSS members can complete an “election and declaration” under Rule 28A of the Scheme nominating the person or persons they would like to receive any cash sum payable on their death. Cash sums are payable in respect of members who die before their pension has come into payment or who die within the ‘guarantee period’ (five years for most members) after their pension starts.

The ‘election’ gives the trustees a discretionary power to pay any cash sum on death to a relative or dependant rather than to the deceased member’s estate. The ‘declaration’ tells the trustees who the member would like to receive the cash. Whilst the trustees are not bound by such declarations they will usually be able to follow the member’s wishes.

Once made, the election is irrevocable, but the nomination can be changed. If you have already made a ‘Rule 28A’ nomination it is a good idea to think about whether it needs updating. If you have not made a nomination, then you may like to think about doing so. A newly completed nomination form will replace any previous nomination.

In order to reinforce the confidentiality of the nominations, members completing new forms are asked to return them in sealed envelopes, which will be held separately from their superannuation file, and will only be opened in the event of their death.

A Rule 28A form can be completed and downloaded from the ‘Requests & Forms’ section of the website, but please remember that it should be sealed in an envelope and clearly marked with your name and Scheme number before being returned to the administration office.

Please note, as the election envelope will not be opened until we are notified of your death:

• Do not enclose any other correspondence in the election envelope
• Ensure the form is completed correctly, unfortunate errors identified following your death may render the form invalid
• Obtain the necessary witness signature.

Dependants’ pensions

If you are a former contributor who paid family benefit contributions a spouse’s pension will be paid as of right if on your death you leave a legal widow, widower or civil partner. If you were to die without leaving a widow, widower or civil partner but there was someone other than a child who was financially dependent on you at your date of death, the Trustees, at their discretion, may award a pension to that person. The pension will be the same amount as the widow/er’s pension. This discretion means the Trustees can recognise partners of either sex and relatives providing they were financially dependent on you. The Trustees can review any discretionary award of pension they make under these arrangements in light of changes in the dependant’s circumstances.

Each year we have a number of cases referred to the Discretions and Appeals Sub-committee where unmarried members have died and where a claim for Adult Dependant’s Allowance is made. Any award of benefits is at the discretion of the Sub-committee. The normal process is that a visit to the claimant is made by a representative of the Coal Industry Social Welfare Organisation (CISWO) to gather evidence of the relationship and financial dependency. It is always helpful if the administration office already has information on file and unmarried members who have an adult dependant are encouraged to write to the administration office setting out the nature of their relationship and any wishes in respect of their pension.

Arrangements on Death

The death of someone close to you is always a stressful time and it will be helpful if your next of kin knows what will happen to your BCSSS benefits in the event of your death.

If you die within the first few years of your pension starting a lump sum may be payable. If you are a former contributor, then a widow, widower, civil partner or dependant’s pension may be payable and there may be an entitlement to children’s allowances. There is no further entitlement to benefit on the death of a beneficiary who is in receipt of a widow, widower, civil partner or dependant’s pension or child allowance.

The most important first step when a beneficiary dies is for the Scheme’s administration office to be notified of the death as soon as is practical. This can be done in writing or by telephone. Administration office staff will need information about the deceased and about the next of kin.

The information required is:

• The full name of the deceased pensioner,
• The pensioner’s address,
• The Scheme number ( this normally begins with an “A” and can be found on the member’s payslip),
• Date of death,
• Date of birth,
• The name of the nearest relative and their relationship to the deceased,
• The address to which any communication should be sent.

The Administration office staff will write to the next of kin, usually within a week. 

The Administration office has a duty to recover any overpayment of pension paid in respect of the period after the date of death.

The circumstances of each case may vary, but if a widow, widower, civil partner or dependant’s pension is being claimed, the applicant will be asked to complete a claim form, and also to send the Death Certificate. If this has not previously been seen, a Marriage Certificate may also be requested. If an adult dependant’s pension is being claimed the claimant will be asked to provide evidence of financial dependency and will normally be interviewed on behalf of the Scheme by a social worker from the Coal Industry Social Welfare Organisation (CISWO).

Assignment of benefits/Court Orders

You may not assign your BCSSS benefits to another person or use them as security for a loan. If you become incapable of managing your own affairs, then a payee can be appointed to receive your pension on your behalf. Typically this would be a close relative or perhaps the manager of a residential home.

The Courts can make certain orders against the Scheme to make a deduction of pension. These are Attachment of Earnings Orders, Income Payment Orders and Orders to make payments to a former spouse as part of a divorce settlement. The Scheme is obliged to comply with these Orders.

Notifying the Scheme if your circumstances change

Please write and let the BCSSS Administration Office know as soon as you can if you change address. This will make sure that the BCSSS can continue to keep in touch with you about the Scheme and about your benefits. You should also let the Scheme know if your marital status changes.

If you are receiving your pension by credit transfer to your bank or building society account, please write and let the Administration Office know if your account details change.

A form for both address changes and bank account changes can be found in the ‘Requests & Forms’ section of this website, please print off, complete and sign this before sending it to the administration office.

Pension Payslips

A payslip showing a breakdown of your BCSSS pension with tax deductions will be issued with each instalment of pension. The Administration office administers the payment of certain other benefits, which are not Scheme benefits, on behalf of the Guarantor. If you are entitled to any such benefits they will be paid with your Scheme pension and included on the payslip. These benefits included payment from:

• Ex-Gratia Pension Make-Up Scheme
• Scientists’ Pension Scheme (Supplementary Arrangements)
• Industrial Death and Retirement Scheme
• Senior Staff Industrial Injuries Scheme
• Colliery Workers Supplementary Scheme

More Information About the Scheme

As well as this website there are Scheme publications and reports which will give you more information about the Scheme. The Trustee’s newsletter, Pensions News, is issued to beneficiaries twice a year and copies of the most recent newsletters can be found on the ‘Publications’ page of this website. A summary of the Scheme’s Annual Report and Accounts is included in the winter issue of the newsletter. The full Report and Accounts are available on request to the Scheme Secretary. Also available from the Secretary are copies of the Scheme and Rules and reports prepared by the Scheme Actuary on each valuation of the Scheme.

State Pension Benefits

The Scheme was contracted out of the State Earnings Related Pension Scheme (SERPS) which started in April 1978 so if you contributed to the BCSSS after this date, you paid lower “contracted-out” rate of National Insurance Contributions. You will not have built up any entitlement to a SERPS pension during your period of contributory membership of the BCSSS. The pension due from contracted out schemes must not be less than a specified minimum amount roughly equal to the foregone SERPS pension, known as the Guaranteed Minimum Pension (GMP).

Most members will have pension entitlements from the BCSSS well in excess of the GMP. There are special arrangements for RPI increases on GMP from State Pension Age and for widows’ and widowers’ pensions. These are explained in the section about pensions increases.

There has been a change to the contracting out legislation which means that members of contracted out schemes no longer accrue a GMP for contributory service after 6 April 1997. Benefits arising from service before this date are not affected and so the change will only apply to those BCSSS members who were contributing to the Scheme after April 1997.

Members who were contributors between April 1961 and April 1975 were contracted out of the State Graduated Pension Scheme. The concept of contracting out of the graduated scheme was essentially the same as for contracting out of SERPS. The Scheme must pay benefits, known as Equivalent Pension Benefits, at least equal to those that would have been earned in the graduated scheme. Generally, this element of pension forms a very small proportion of a member’s BCSSS entitlement.

Membership of the BCSSS does not affect entitlement to the basic State pension.

Inland Revenue (Now known as HM Revenue and Customs) Limits

On 6 April 2006, HM Revenue and Customs (HMRC) limits on contributions and benefits from registered pension schemes were replaced by a new regime for pensions taxation. All types of registered pension scheme now come under one set of regulations, and pensions and lump sums from company schemes (like the BCSSS) are no longer limited by a complex formula based on salary and service with the employer who sponsored the scheme. Almost all pension arrangements (including BCSSS) are registered for favourable tax status, so for most people the new tax regime applies to all sources of pension income, other than State pensions.

The taxation of pensions is a complex business and whilst we have tried to summarise the key information below that will affect BCSSS pensions, if you are making decisions about your pension arrangements we strongly recommend that you consider seeking separate financial advice rather than rely on the information below. However, the main points are:

A Lifetime Allowance for all pension savings replaced the previous complex limits for different types of pension arrangement. The allowance applies to the total benefit value of all registered schemes, not just BCSSS, at the time benefits are put into payment. In the current tax year (2008/2009) the Lifetime Allowance is £1.65 million. Increases to the Allowance have been set down for the next 5 years.

Schemes have the option to allow members, at the time of retirement, to take tax-free cash sums of up to 25% of the total value of their scheme benefits, subject to a maximum of 25% of the Lifetime Allowance.

The value of benefits is determined by a standard formula. The change allows more BCSSS pension to be taken as cash than was available before April 2006.

The youngest retirement age at which pension may be taken is to increase from age 50 to age 55 by 2010. However, in a scheme like the BCSSS where members had an unconditional right to take a pension at age 50 before the changes, they will retain that right.

The regulations allow increased flexibility in how lump sum death benefits can be taken. Where benefits can be converted into cash, the option will be offered. However, benefits that replace the State second pension (SERPS) will still be paid as widow or widowers’ pension unless they are covered by the category of very small pensions.

Very small pensions can be converted to cash between the ages of 60 and 75 provided a member’s total benefits from all sources, do not exceed 1% of the Lifetime Allowance and do not exceed a capital value of £2,000.

Resolving Pension Problems

Fortunately there are relatively few occasions on which ‘disputes’ arise between members and the officers of the Scheme and its Trustees. Problems or complaints can usually be resolved when they first arise with either the Scheme’s Administration Office or with the Scheme’s secretariat staff at Coal Pension Trustees Services Ltd.

If you have a problem that you have not been able to resolve to your satisfaction, you can make a formal complaint using the Scheme’s Internal Dispute Resolution procedure.

In the first instance the Chief Executive or Benefits Manager at Coal Pension Trustees will deal with the complaint on the Trustees’ behalf and will let you have a decision on your complaint usually within two weeks, although complex issues may take a little longer.

If you are not satisfied with the decision at the first stage you can ask for your complaint to be referred to a second stage where it will be considered by the Trustees. The Trustees will review your complaint; they may ratify the decision taken at the first stage or they may take a different view. The Trustees will usually let you have their decision within two months of your appeal.

Further details of the dispute resolution procedure and copies of the forms can be found under the Requests & Forms page of this website.