Civil service trade unions have urged the Cabinet Office to write off overpayments made to hundreds of retired civil servants, after it emerged that pensioners were facing demands for hundreds, and in some cases thousands, of pounds.
An audit by pensions administrator MyCSP has so far found that some 12,000 civil service pensioners have been paid the wrong amount, some for several years. Up to 10% of them have been paid more than they should have. All are being adjusted to the correct level in what the Cabinet Office has called a series of revisions.
As well as having their pensions cut, up to 1,200 former officials who have been overpaid are being asked to pay back the extra money they have received. An investigation by CSW discovered some pensioners were facing demands of more than £8,000 at the same time as having their payments docked.
"It is not good enough for the scheme administrators to just demand repayment when these overpayments were a result of their own error,” Garry Graham, Prospect deputy general secretary, told CSW.
In March, the Cabinet Office said MyCSP would not seek to claw back £22m in payments that had arisen from a separate error involving a Guaranteed Minimum Pension miscalculation, and Graham said there was a “strong argument for these cases to be treated in the same way”.
“Even if the revised calculations are correct, there is no way the scheme members could have been aware of the errors and they may have spent the money already,” he added.
In letters sent to retired civil servants about the overpayments, MyCSP, which administers civil service pensions on behalf of the Cabinet Office, said it had calculated pensioners' benefit entitlements based on the information it had when they retired.
“Since then, we have received further information from your employer that shows a decrease in your pensionable earnings,” the letters said.
The Cabinet Office has since said that the errors came to light when MyCSP reviewed around 300,000 people’s pension entitlements. CSW understands more cases could emerge in future as MyCSP currently pays around 670,000 pensions. The administrator handles around 1.5 million current and former civil servants’ pensions altogether.
Simon Hardcastle, national pensions officer at the FDA, said the overpayments were evidence of “mismanagement of personal data by HR payroll departments” at public service employers, and that MyCSP had insufficient checks and balances in place to catch the errors earlier.
“Any overpayments should be written off and pensions in payment adjusted going forward as these compounded errors are not the fault of people in retirement,” he said.
Hardcastle also said the Cabinet Office and MyCSP should make sure pensioners who have been underpaid receive the money they are owed. The Cabinet Office told CSW that “over 90%” of the people affected by the revisions would see their pension rise as they had not been paid enough – suggesting 10,800 or more ex-civil servants could be in line to receive backpay.
Hardcastle urged the two organisations to work with civil service employers to compensate those who had been underpaid by offering them notional interest on the sums they are owed.
A spokesperson for the PCS union said it was seeking an urgent meeting with the Cabinet Office to discuss the matter. “This is extremely concerning for our associate and retired members,” they said.
A Cabinet Office spokesperson said: “Civil service HR departments provide and have provided all information necessary for pension administrators to correctly calculate retiring civil servants’ pensions.
“We continue to work hard with the current administrator to improve processes and ensure any discrepancies are kept to an absolute minimum.”
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