An estimated £22m of overpayments have been reported in the civil service pension scheme accounts.
The overpayments won’t be clawed back, but these scheme members could face reductions in their future income as pension payments are corrected.
People who were members of defined benefit contribution schemes between 1978 and 1997 were entitled to a guaranteed minimum pension (GMP) from the scheme.
GMP is calculated by using a specific formula. However, the process of reconciling scheme data with HMRC data identified errors affecting the calculation of these payments and led to the overpayments.
The civil service accounts for 2016-17 were presented to Parliament on 20th December 2017 and in them it was noted: “The ongoing guaranteed minimum pension reconciliation work has identified historic overpayments of £22 million to existing pensioners.
“These pensions will be corrected going forward and a decision taken in October 2017 to write off the historic overpayments which is classified as a loss.”
Garry Graham, Prospect deputy general secretary, said: “The decision to write off the past overpayments is the correct one. The errors were made by the scheme and there was no way members could have been expected to realise they were being overpaid.
“However the proposed reductions in future pension income will cause real hardship as members’ expectations are based on the level of pension they thought they were entitled to.
“The scale of the overpayments in the civil service pension schemes alone suggests that hundreds of thousands of members might be affected across all schemes.
“Some private sector schemes may seek repayment of past overpayments. Prospect will support any members faced with demands of this kind."