More than 100 civil service employers are now offering emergency loans to help recently-retired officials through the Civil Service Pension Scheme’s backlog crisis, while dozens of organisations are yet to confirm they are doing so.
Thousands of retired civil servants have been left without regular payments or lump sums because of the mountain of incomplete casework that came to light following the transfer of scheme administration from MyCSP to Capita at the beginning of December.
Earlier this month, members of parliament’s Public Accounts Committee were told that around 8,500 pensioners were still waiting for payments, and that the backlog Capita is dealing with had increased to around 120,000 cases.
As part of a package of emergency help measures, the Cabinet Office said that civil service employers will make loans of up to £10,000 to CSPS members waiting for payments, with the aim of tiding them through hardship.
Earlier this month, PAC chair Sir Geoffrey Clifton-Brown asked the department to confirm how many departments and agencies were “set up” to grant the hardship loans.
A response from Cabinet Office permanent secretary Cat Little, dated 23 February, says that 116 civil service employers have reported setting up schemes so far.
Little said that the figure included all major departments and represented a “majority” of CSPS members. However, the reported figure suggests that a sizable number of employers have not confirmed the creation of a loan scheme.
According to a House of Commons Library research briefing published last month, the Civil Service Pension Scheme has a total of 299 employers, including 205 public-sector organisations and 94 private-sector employers.
Asked by Civil Service World, the Cabinet Office said that a total of 223 civil service employers are “in scope” for the transition-loan policy – meaning that 107 employers had not informed the department that they have set up a loan scheme as of Monday's update to MPs.
Little wrote to MPs: “We have requested that all civil service employers confirm they are offering loans and provide contact details for the teams responsible for their administration. To date, 116 employers have confirmed they are issuing loans to CSPS members and have provided specific contact points. This includes the largest employers – the Department of Work and Pensions, HMRC, Ministry of Justice, the Home Office, and Ministry of Defence.
“Collectively this represents the majority of CSPS members impacted by the non-delivery of pensions. We continue to engage with all civil service employers to ensure every eligible member is able to receive a loan. This includes any member due to retire, or those who have retired within the last 12 months, who are still awaiting payment.”
There are separate hardship-loan arrangements for CSPS members who retired more than 12 months ago and are still waiting for payment. Capita is responsible for hardship loans to them, and in relation to dependants of CSPS members who have died.
In her letter, Little told MPs that loan policy and guidance has been provided to all departmental HR directors and civil service employer pension leads. She added that all civil service employers had been asked to proactively contact recent retirees to ensure they are aware that these loans are available.
CSW asked the Cabinet Office for its understanding of the reasons why some 107 civil service employers had so far been unable to confirm that a hardship-loan scheme is in place. A spokesperson said the “vast majority” of affected members are covered by the current loan scheme and that the department is “currently engaging all civil service employers”.
Little said in her letter that as of Monday this week civil service employers had reported paying 287 hardship loans to CSPS members, with a total value of £1,643,137 paid out, representing an average value of £5,725 per loan paid.
The perm sec said Cabinet Office's latest update from Capita reported that 1,804 CSPS members have been flagged as “potentially experiencing hardship”, while 864 scheme members had seen their pension benefit, lump sum – or both – paid. A further 375 cases were described as being at “quote stage”.
The Cabinet Office still expects it to take until June for all aspects of CSPS administration to hit “standard contractual levels”, Little said.
Compensation call
CSPS members whose payments have been delayed are entitled to interest equivalent to the Bank of England base rate, which is currently 3.75%, plus 1%.
However, PCS – which is the civil service’s biggest union – says such a level of compensation does not reflect the level of suffering scheme members have endured.
It said many pensioners had been deprived of their main source of income and had been unable to cover household costs. A parliamentary debate three weeks ago highlighted numerous cases.
“The Pensions Ombudsman does have the power to direct the scheme to compensate for maladministration,” the union said yesterday.
“PCS will continue to press for the best available redress for scheme members in our talks with the Cabinet Office.”
Back in January the FDA union, which represents senior officials in the civil service and wider public sector, said it believed the Cabinet Office should open a compensation scheme for CSPS members affected by delayed payments.