Hundreds of retired public servants – and their dependants – may be without money to celebrate Christmas because their pensions payments have been delayed by months, Prospect union warned today (Tuesday).
The union has been approached by dozens of former civil servants or their dependants seeking urgent help and is afraid that many more could be affected.
“I never imagined I’d see the day when loyal public servants who have devoted their working lives to the UK would be treated so callously,” said Prospect national secretary Alan Leighton.
“One widow came to me whose husband, a former civil servant, died in October. Yet she still hasn’t had a penny of the pension she is entitled to (see case study, below).
“We are told the problems are because of a new computer system. But underlying that is the back-door privatisation of the organisation that calculates, administers and now pays the pensions. Once more the government is trying to do things on the cheap in the name of efficiency, and vulnerable, elderly people are suffering.”
The affected pensioners are former civil servants (or their dependants) and members of the Principal Civil Service Pension Scheme.
The scheme is run by a so-called “mutual”, MyCSP, which administers the pensions of 1.5 million civil servants.
The coalition launched MyCSP – its first flagship “mutual joint venture” – in May 2012 as a commercial business. The mutual is now 51% owned by private company Equiniti, 25% by an employee trust called Employee Partners and 25% by central government.
Before MyCSP took over the running of civil service pensions they were handled in-house, with payments outsourced to Capita.
Then in September 2014, on top of its administration duties, MyCSP took over responsibility for payments from Capita. This coincided with the late delivery of a new IT system, provided by an Equiniti subsidiary, and preparation for the new alpha civil service pension scheme, which begins next year.
My CSP said: “We are dealing with a significant increase in queries at present - 65% more than compared to normal business – and waiting times have been affected.”
CASE STUDIES
Mrs A
Mrs A’s husband died on 21 October 2014. Despite repeated calls and letters, Mrs A was still waiting for her pension on 16 December. “It is all very difficult, especially at this time of year. I have been overdrawn at the bank and have been dipping into savings, I still have a mortgage to pay and have borrowed from my children.
“I have a bill of over £600 to pay next week, my husband had home care for nine months and this is the last one for the three weeks before he died.”
Mr T
Mr T, who worked for the Department for Environment, Food and Rural Affairs, took ill-health retirement on 31 October and has not yet received any pension payment.
“I was retired on ill health grounds on 31 October. This was also the last day on which I received any remuneration from Defra.
“I am without any pension payment, although I have been promised payment on a number of occasions through the My CSP call centre. I am not permitted by the call centre to make direct contact with the administrators to seek an update on the projected timetable for my being paid.
“I had been promised payment for part of my pension by today [22 December] but have subsequently learned by phone that the authorisation has not yet been given for payment.
“As my promised pension has not yet been provided, I have had to borrow money (which is now exhausted) but am unlikely to be able to borrow more, given that I do not know what my income will be.
“Please would you act to allow payment of my pension or an ex gratia payment in advance of settlement of my pension, in order that I have sufficient money to pay for Christmas and that I do not default on my financial commitment payments, which may threaten my house security and will definitely affect my credit rating.”