Civil service unions have welcomed action to tackle the Civil Service Pension Scheme crisis but urged the government to “go further” by opening a compensation scheme and delaying voluntary exit deadlines.
The unions have also sought assurance over the arrangements for hardship loans.
On Wednesday, Capita and the Cabinet Office announced an action plan to tackle the issues with the scheme since the transfer from MyCSP on 1 December, including setting up a hardship fund, a prioritisation plan, and supporting Capita with surge support of more than 150 civil servants.
The plan follows the creation of a taskforce led by HM Revenue and Customs’ second permanent secretary Angela MacDonald to address the escalation of issues with the pension scheme, which have seen some pensioners waiting months for payments.
Adrian Prandle, the FDA’s assistant general secretary, said he is “broadly encouraged by the work undertaken so far by the Cabinet Office’s taskforce, and the immediate actions of their recovery plan," but he remains "concerned about the scale of the challenge ahead”.
The union, which represents senior civil servants, said it is now pressing the Cabinet Office and government departments to “ensure that the burden of evidence is not unnecessarily high to access support and all of those in need of hardship loans are able to access them”. The FDA said it will also work to ensure "all of those in need of hardship loans are able to access them”.
Prospect, the union for specialist and technical civil servants, has raised similar concerns .
“This is a scandal which shouldn’t have been allowed to happen but it is good to see the Cabinet Office taking action," Steve Thomas, Prospect's deputy general secretary, said.
"The new system to provide hardship loans will give welcome relief to many people, and we appreciate the effort that has gone in to delivering it. But we do have concerns that it will not be accessed by everybody who has suffered significant detriment because of these delays. And sadly, even amounts of £5,000 or £10,000 will not fully address the worst cases."
Former officials who retired in the last 12 months have been asked to contact their former department for support, while those who left the civil service more than 12 months ago have to raise hardship concerns directly with Capita. Unions have been seeking reassurances that there will be a centrally agreed process to ensure consistency of outcomes.
Thomas said there is now "harmisation of the process across all departments...rather than the piecemeal experience people have faced to date", which is a "a further huge step".
He said the appointment of Angela McDonald to help develop and implement a recovery plan was also "very welcome", but said it was a concern that "the problems are so large that it is not even possible for her to give a target date for when service might return to acceptable levels".
"People affected need some clarity as soon as possible," he added.
PCS, the civil service’s biggest union, said the introduction of interest-free hardship loans for civil servants who have been left without pension payments “is a necessary first step” and but added that does not resolve the underlying failure of pension administration, nor compensate pensioners for the hardship they have already endured.
Fran Heathcote, PCS’s general secretary, said: “Civil servants who have been left in financial hardship because of delays receiving their pensions should never have been put in this position in the first place. PCS has been pushing relentlessly for urgent support, and while we welcome the introduction of hardship loans, this does not undo the damage already done.
“Our retired members should not have to wait months for money they have worked and paid into all their lives. The government must now go further – properly resource the Civil Service Pension Scheme, deliver compensation, and seriously consider bringing the service back in house to prevent this happening again.”
The FDA union also said the Cabinet Office should open a compensation scheme “covering the distress and inconvenience caused, and interest on late payments”, and remove the 31 March deadline for voluntary exits under the current VES round to “allow time for accurate quotations, and time for members to consider them”.
Asked about introducing a compensation scheme on Wednesday, Cabinet Office permanent secretary Cat Little told MPs that there is already one in place within the pension scheme contract for people “who suffer because they’ve had to make decisions or had to access emergency funds that have high levels of interest rates”.
The Cabinet Office and Capita have been approached for comment.