The PCS union has branded attempts to recover millions of pounds in overpayments to civil service pensioners as “misleading”, saying maladministration is to blame for the errors.
The union, which represents some 200,000 current and former civil servants, condemned pensions administrator MyCSP’s handling of the overpayments, which were discovered in a recent review and date back 15 years, in a statement yesterday.
More than 2,000 ex-civil servants are facing repayment demands adding up to £2.7m, MyCSP’s chief executive, Mike Thurstan, revealed in a letter to the Public Administration and Constitutional Affairs Committee in October. People have been overpaid by an average of £1,200, with the highest bill reaching £34,000.
The review, which began in 2016 and concluded this year, found at least 12,000 people had been paid too much or too little pension, with the majority having been underpaid.
PACAC chair Sir Bernard Jenkin wrote to MyCSP demanding answers after CSW revealed pensioners were facing demands for large sums of money – sometimes reaching tens of thousands of pounds and dating back more than a decade.
CSW’s investigation found multiple, unrelated errors in the information given to MyCSP by employers when people retired, including mistakes in calculating overtime payments and missing pay data, had led to them being paid the wrong amount.
Thurstan then admitted in his letter that in many cases, the administrator had failed to recalculate pension payments after they were given corrected figures by the employers, which include government departments.
“This meant that a number of pensions, which should have been revised, had not been,” he said.
In a statement yesterday, PCS general secretary Mark Serwotka said: “The maladministration involved here is very serious... We believe the root cause was the rush to outsource pension administration and shared services and it is simply unacceptable to subject pensioners to hardship and distress years later as a result”.
PCS has called on the Cabinet Office, which is ultimately responsible for the pension scheme, to write off the overpayments. The department has so far refused, saying Treasury guidance on managing public money means it must try to recover the cash.
The most recent tranche of letters sent to pensioners warn that if they do not begin paying the money back within 28 days, MyCSP will automatically put them on a “repayment plan”.
“We will deduct your overpayment from your pension each month until we have recovered the overpayment in full,” the letters said.
PCS claim this demand for immediate repayment to start is misleading, as the Pensions Ombudsman has still to rule on whether the issue relates to maladministration. "PCS advice not to agree to repay at this stage still stands. If you have received such a letter you have the right to object. If you do this, making clear that the overpayment is due to maladministration, the deductions cannot be made because the Pensions Ombudsman has still to rule on the issues relating to maladministration," according to the union.
Responding to the union's statement, a Cabinet Office spokesperson said: “We recognise the inconvenience this will cause some former employees, but we are obliged to recover overpayments where it will be of benefit to the taxpayer to do so.
“We must ensure pensioners are paid their entitlement... we offer a number of repayment options to those who have been overpaid.”