A senior MP has said the Cabinet Office must provide more details of the events that led to some 12,000 retired civil servants being paid too much or too little pension after CSW revealed former officials had received repayment demands worth thousands of pounds.
Sir Bernard Jenkin, chair of the influential Public Administration and Constitutional Affairs Committee, said he would be seeking answers about a large-scale revision exercise by the pensions administrator MyCSP that began in 2016, in which it discovered that thousands of the pensions it was paying out were incorrect.
The Cabinet Office has said “more than 90%” of those affected have been underpaid, leaving up to 1,200 who have been paid too much, some for several years, and are now being asked to return the extra cash. A CSW investigation last month revealed that some had received demands for thousands of pounds, with no explanation as to how errors had been made.
The Cabinet Office, which as scheme manager is responsible for civil service pensions arrangements, is planning to commission the Government Internal Audit Agency to review the processes in place to ensure pension entitlements are correct.
But Jenkin told CSW: “The 2016 review and subsequent developments clearly raise a number of questions for the Cabinet Office, and my committee will be seeking answers as a matter of urgency.”
“All contributors to civil service pension schemes have a right to expect that these are managed to the highest possible standards,” he added.
Letters to pensioners shared with CSW show the overpayments appear to have arisen from a multitude of unrelated errors dating back more than 10 years – ranging from incorrectly-recorded part-time pay to errors in managing pensions abatements when civil servants took partial retirement. Some of the errors predate the establishment of MyCSP in 2012.
Civil service trade unions have called on the Cabinet Office to write off the overpayments, saying pensioners could not have known they were being paid too much. Unions including the FDA, PCS and Prospect have since held confidential talks with the department about the errors.
The Cabinet Office has not provided details of how the overpayments arose or what triggered the review, which concluded last month. A page published on the Civil Service Pensions website last week pensions could be revised post-retirement because of “an update or change to the information/data used to calculate a member’s benefits”.
It said a delay in correcting an error could arise from “a delay in the processing of payroll information or no notification being sent through to the payroll department”.
“Robust processes are now in place to ensure that going forward any revisions to payments for retiring members benefits are carried out on a timely basis, which is expected to be within a few months of retirement,” it added.
‘Heavy-handed, insensitive and completely unjustified’
Since first reporting on pension overpayments, CSW has been inundated with reports from retired civil servants who have faced demands to repay up to £15,000.
Some said they had experienced high levels of anxiety and even health problems that they attributed to the stress of being asked for large sums of money. Some had been told they could face legal action if they did not pay.
Only a handful had managed to obtain a breakdown of the figures used to assess their entitlements in the revision exercise.
One retired civil servant, who contacted CSW after receiving a demand for nearly £9,000, was sent a breakdown of the 2013 figures used to calculate his overpayment with two months’ pay missing. After he provided payslips demonstrating the missing earnings, he was told MyCSP would not seek repayment while it contacted his employer to verify the numbers. However, an annual pension cut of around £200 has stayed in place.
Another – a former Ministry of Defence official who asked to remain anonymous while he appealed the demand – was told he owed nearly £2,000 because of a change to his recorded salary. “Further information regarding the precise details of the change were not forthcoming from MyCSP, despite my best efforts,” he said.
He said it took the intervention of an HR manager to obtain a detailed breakdown of the figures involved – at which point MyCSP said there had been an error in calculating his pension abatement when he partially retired in 2010, and that dates of radio paging allowance and overtime payments had previously been recorded incorrectly.
“I worked a long time to earn my pension and I think it is hugely unfair that I am now being told that I must repay money I have received – and spent – in good faith, because of an alleged mistake or misinterpretation of the pay and pension rules that may have been made either by my employer or my pension provider, many years ago,” he said.
“The threat of legal action if I do not comply, together with the withholding of part of my pension is heavy handed, insensitive and in my opinion completely unjustified.”
Asked for details of how the overpayments had arisen, and why they had been allowed to go uncorrected for so long, a Cabinet Office spokesperson said: “We continue to work hard with the current administrator to improve processes and ensure any discrepancies are kept to an absolute minimum.”