Public Sector Pensions Overpaid
 

Servicemen, doctors and nurses overpaid by more than £100million on pensions

Tens of thousands of former servicemen, doctors and nurses have been overpaid by more than £100million in their pensions, the Government will admit on Tuesday.

However ministers will say that they do not want the cash back, in a move which is likely to intensify criticism of the scale of public sector pensions, which are estimated to be £1 trillion in the red.

The mistake was revealed to the House of Commons yesterday by Liberal Democrat MP Vince Cable. The LibDem treasury spokesman said the error had only just been discovered and he had been asked by the head of the civil service not to publicise it for several days.

In a brief intervention, Chancellor Alistair Darling said the money would not have to be repaid but adjustments would be necessary from next year.

Mr Cable disclosed the error, which he said had been going on for decades, during a debate on the Queen's Speech. He said he was contacted by a reporter about a company, which pays out public sector pensions to former members of the armed services and NHS. The company had been wrongly paying pensions to thousands of public sector pensioners. He said: "This error had just been discovered and the company were about to start retrieving the money from the pensioners."

Mr Cable alerted Sir Gus O'Donnell, the head of the civil service, last week who asked him not to make the mistake public for several days. It is understood that written letters have been sent out overnight from the Cabinet Office to the workers affected by the mistake.

Mr Cable told MPs: "I hope none of us can face the possibility of large numbers of ex-servicemen suddenly being faced with bailiffs turning up and asking them to repay overpayments."

Mr Darling replied: "You were asking about repayments of money that has been overpaid - I'd think it would be better I make it clear that isn't going to happen. It will be necessary to adjust what's paid for the future."

Speaking afterwards, Mr Cable added: "It is critical that the Government comes clean over how long it has known about this problem. There must be an immediate investigation into how this could have gone unchecked for so many years. The Government must promise not to try and claw back any money from the workers affected.".............

Pension Overpayments
 

I may be cynical but I would bet that apart from adjusting future payments, to correct the anomaly, there will be a further reduction to get overpayments back! Is everybody who is drawing a pension affected by this error going to receive an individually calcuated and explained statement of their pension position? Even if they do will it be accurate and/or comprehensible? I would think not!

If the system is such a shambles, could it be reasonable to ask if there had been any under payment to some individuals?

I bet they would not have bothered to make any adjustments if the error was in their favour!!

Time for a complete investigation me thinks!!

I honestly dont see why individuals shouldnt have to pay back overpayments... This is a typical example that will be used at a later date by the CBI re: fat-cat public sector gold plated final salary pensions.

From BBCi here "The government has said the money need not be repaid but thousands still face pension cuts from April."

So perhaps a drop, but no recovery of the overpayment.

Fascinating timing!! have just received a demand from Xafinity (WTH are they??) for a repayment (nicely timed for Xmas) The amount is substantial and was the result of A F Pensions failing to notify me that the pension split following my divorce had been activated. This activation should have been contingent on the sale of our house but, instead, was timed from the decree absolute AND I WAS NOT INFORMED. The house sale was completed recently and I was waiting for notification from AFP of the change of payment ..... NOTHING!! ... except this bald demand for repayment. Just to compound matters, I had continued to make monthly maintenance payments amounting to thousands of pounds and that is not going to be recoverable.
Nice one AFP!!!
The details with a copy of the demand have been mailed to our MP (thankfully, one of Mr Cable's colleagues) I await a reply.

Vin Rouge - presumably, you are invariably happy to place yourself in financial difficulties to rectify SOMEONE ELSE'S ERRORS .. Yes??
Nicely thought through, sir!

Hang on, if you are too lazy to bother working out your entitlement, that is no-ones fault than your own. Why should the taxpayer body as a whole have to pay for individuals receiving an excess to their entitlement? In the main, the individuals involved will have plenty of equity in their homes, which means due overpayments could be collected on disposal of an individuals estate if necessary. At a time when the private sector is taking, in my opinion, far too large a burden from the state sector, I think for the sakes of a few million, the effort should be made to repay any overpayment. Those in the private sector would be expected to. Why shouldn't we? The token effort should be made.

I sympathize with your situation, which, in your case could be resolved between yourself and ex-spouse?

Whilst you're up on your pedestal, perhaps you can enlighten me as to how we can ensure our pension to be wholly accurate?

If the payment matches closely to 'pension estimates' from PMA over a three year period before leaving the service, and also matches 'notice of payments' letters from Paymaster, what else can we do???

Furthermore, maybe you can also enlighten me as to what the correct payment will be when I reach at age 55, after 25 years service, leaving as a Chf Tech???

'High and mighty', I await your devine knowledge on the subject, to the nearest £ will suffice.

Square of butter springs to mind.........

Vin Rouge are you seriously saying that the private sector is propping up the state sector? If so you are talking complete @rse. Where have you been for the past 20 years? We have had nothing but the private sector sponging off the taxpayer. Privitisations, PFIs, Government 'Projects' and on top of that £300 Billion (at least) to bail out the banks and stock markets. I also find it ironic that the majority of government problems in defence, education and finance are as a result of contracting out to 3rd party private companies (which the CBI encouraged).

It could simply be an underhand way to cut pensions. I wouldn't trust the present bunch one iota.

Now would that be Pension 75 or Pension 05 that is affected?

Seems it is the way the annual increase is added on that is causing the problem.

Government and computers just don't seem to work do they.

Why are they waiting until April ?

I don't suppose there is any chance of them losing the data this time? No I thought not.

But at the end of the day (it gets dark) Who funds the public sector? It aint the public sector.

I have been around for the past 20 years, and I have seen a government get its country and its people into a mountain of debt for the past 8. That includes allowing the public at large to spend a hideous amount of cash by borrowing. debt that has been taxed (highly) to fund ridiculously inefficient public services, a bloated Civil Service that does little it seems other than reduce the unemployment stats and very little productivity for the nation as a whole. It needs to stop... No, Its GOING to stop, because there is no money left to pay for it.

Look, I know its tough, but its one great **** sandwich and we all have to take a bite, especially whilst the private sector is getting hammered so hard in the crunch. All I want is the nation to be fixed as soon as possible. Its going to take a lot more effort I believe than the government are letting on. We just cant carry on writing off a couple of million here and there because its small change.

Vin Rouge,
have you ever been a serviceman? At what point of a serviceman's career do you intend he/she should turn round and calculate their correct pension, bearing in mind how the serviceman obtains pension information?

Apologies to groundies for the next bit - there's a bloody good moral (legal I'm less sure of) argument that like all other ex aircrew my pension is smaller than it ought to be, as flying pay is a regular part of pay (I'd call 22 years out of 23 'regular') but conveniently dismissed from salary when calculating pensions - perhaps you'd like to address this anomaly from the back of your horse....should not the government just bite the bullet and accept they have underpaid my pension for the past 8 years through legerdemain?

As for drawing the line somewhere - this government is indebting us to the tune of billions, the pensions overpayment info is scanty as yet but appears to be of the magnitude of, say, a badly managed PFI school in the midlands, so if you really want to draw the line somewhere perhaps we could start with the profligate waste we all see about us, rather than picking on the one sector of the population who have proved their commitment to the future health of the nation and generations to come.

Dave

Yeah, dave, think you are right... Unfortunately, dont think the waste is going to be stopped any time soon.

Just so you know, I am a fellow aircrew mate, having served now for 8 years! :ok:

The calculation of payments thing... Unfortunately, I find myself having to do it every month. JPA. I really hope you left before it came in... :ugh:

NEWT said
'If the system is such a shambles, could it be reasonable to ask if there had been any under payment to some individuals? '


Well NEWT you are correct thay underpaid my Preserved Pesion and lump sum
and it was only after a load of phone calls and letters that it was corrected.
The way my accountant found the error was because I requested an estimate 5 years before the pension became due. When it was first paid it was close enough to the expected amount that we took no action.
However during the summer I was recovering from knee replacement operations and needed a fight so I took them on and won. It was worth £800 in back lump sum, £600 in back pension and a monthley pension increase of £20 per month.

Cheers ***

Wait until AFPS 10 kicks in - AFPS 75/05 pays out too much for too long the MOD have 'only' just discovered.

PAS mates leaving at 55 get a pretty big pension - perhaps thats why assimmilation offers are being reduced by 65%:mad:

May I suggest:

https://www.forpen.org/application/

If this is going to get nasty, best you get all the help you can and the benifits alone are worth the 23 quid :ok:

Vin Rouge, you have warmed my heart - yes, really.
That, in these financially straitened times, there should be one amongst us who would be so socially aware and sensitive as to want to beggar himself to make up for someone else's errors, evokes a warm glow deep in my being.
My problem is, actually, not laziness, (although I'm pretty good at that as well!), but ignorance. This trait I share with my solicitor and my ex-wife's as we all had to resort to a financial guru (at considerable expense to me) to calculate the relevant amounts and their apportioning. AFP were presented with the benefit of those calculations by the Court and were left with the onerous chore of amending the monthly payments accordingly AND initiating them at the Court's specified time AND INFORMING me that this had happened. They, lamentably, failed totally, on all three counts. Now, while you would obviously wish to immediately repay the amount involved and would have the financial resources so to do, as a 73 year old pensioner my finances are rather more limiting and my 35 years service was through a period when accruing financial security was a pipe dream.
That you now operate in the lavishly rewarded conditions which allow you to be so socially sensitive means that our limited finances were the avenue for better times for those who followed us ... and so it should be. However, for me to be as forgiving as you would be would mean real hardship and my fellow-feeling then becomes less charitable.
Don't allow my Scrooge-like attitude to dampen your desire to do charitable works - especially at this time of year and if you feel an overwhelming desire to send a cheque to AFP to help them in their time of need, please feel free.
Now then, what IS that word I'm looking for????

Does it rhyme with 'rowlocks' by any chance?
(I'm good at quizzes <g>)

Stay safe, try not to spend the huge sums the government hands out on frivolous items old chap...a fellow only needs SO MUCH moustache wax, for example, any more is simple profligacy, whilst a single top hat should suffice for any occasion.

Vin Rouge - I see your problem, you are looking through the wrong end of the telescope.

(Nobody can object to be screwed up front, it is being screwed in retrospect that we object to)

Vin Rouge? 8 years aircrew already? Oh, well done, one day you too might be entitled to a pension but try to bear in mind that some of us here left the service while you were still a twinkle in your old man's eye and things were very different. Left before JPA? You're having a laugh. The RAF had just one classified computer, kept in Station Ops and we had no access. I used to get paid by cheque into my Cox's and Kings account. I think it was £75 a month to begin with. One month they ran out of money and we didn't get paid because they "forgot". Trying to get an assessment of personal pension entitlement out of the Paymaster was like trying to get blood out of a stone. We had no way of working it out for ourselves.

Ladies & Gentlemen...

Presenting the IQ20 award for the most gibberish in an internet post two thousand and eight...

Stand back, we have a winner!

The Old Fat One

I'm having a little difficulty with your & VR's positions - but then I do so with an increasing number of things these days. I thunk I know what you mean, but you'll have to adopt the CSOTM approach I'm afraid.

Davejb,

I understood that Flying Pay was in fact an allowance and thus not a consolidated part of your pay, hence not calculable for pension purposes. Happy to be corrected if I'm wrong.

and: -

Vin Rouge, I suggest you know little of which you dribble on about. The council I now work for is in the top quartile of the country, so by definition not inneficient. I also get paid less than the the private sector people doing similar work. My pension is not solid gold or even copper bottomed, in fact we have all just been the victim of "pay more, get less" adjustments to the entitlements. It's also pays less of a percentage for the years served than my service pension does, around 27% for 22 years as opposed to 33% for the RAF pension.

As for the civil service, I used to be one of those wasters who are merely keeping the unemployed numbers down. By and large they are dedicated people who are grossly underpaid and grossly overworked, well at least in the Pension Service they were.

As I said in an earlier post, please wind your collective necks in over public sector pay and conditions that you all know so much about, lest I bring up the free rent, free coal, free electricity and gas that everyone in the Forces gets. And THAT is as accurate as most of the posts re public sector workers.

Doc C. :ugh::ugh:


ps I'm just as fiercly protective of the Armed Forces when people spout rot too!

?Statement?
 

Had my head down over the last 2 days - did anyone see a statement from HMG with any more details than in the original trailer?

RgdsOB96

(And best wishes to all for a Happy New Year!).

I'll freely admit that foresight with regard to these matters is not something I'm claiming but I'm very happy to have made the decision to leave the RAF before pensions etc. became an issue and even happier to have left the country at the same time...

Vin, you might want to consider my solution... :}

So what does this mean for a few of us that have a few years left to serve to get the 22 , will or can they change the pension. I am not an expert in this field so some constructive answer might help a litle bit relive my worry. Ive only stayed in the last few years because it would be silly to throw away a 22 year pension.

As far as I can see from the letter I got yesterday from those nice people at Xaffinity Paymaster who think they may have inadvertently given me too many of the Queen's shillings, any adjustment required will be tiny. It might be bigger for those who are older and have been in receipt of pension for longer.

It seems that the error is in the annual pension increases due to the way increases were applied to the Guaranteed Minimum Pension (GMP). Due to an admin cock-up both State pension and Service pension were paying the same increase.

So it was not much help knowing what pension one was entitled to on retirement because the errors are in the annual increases awarded.

More startling is the revelation that those errors and the overpayments are to continue until April - very generous, thankyou Xaffinity - Happy Christmas!

Right, so your not a member of the military aircrew fraternity, or one of the backroom boys and girls without whom nothing would leave the ground then?

Bye then.

TOFO many thanks for your point-by-point demolition of my post #9, in response can I refer you to Simon Jenkins article in today's Guardian.
Please note that despite writing in the Gruniad, Jenkins is a noted cheerleader for Thatcherism.

BTW thanks for the award, and if its underwritten by a PFI, when in 2010 can I pick it up?

2008 AFPS Newsletter
 

I retired in 1998 after 37 years service, man and boy. The Newsletter has quite a bit on the possibility of overpayment re the Graduated Minimum Pension (GMP). Soddim mentions it above. I gather that those liable to be affected are those in receipt of the GMP, possibly those retiring after only the minimum pensionable engagement or many years ago? Don't know but will be checking the post for any unwelcome letters.

A Merry Christmas to all our readers!

Pip pip

ON

Doc Cruces,
yes, despite being a fairly noticeable part of what I was paid and taxed on each month it is indeed officially an allowance. Oddly enough the recruiting adverts in the papers as I joined didn't stress that part of the £80 odd a week* I'd be paid as NCO aircrew would be in the form of an allowance that would not count as pay for pension purposes.

Dave

*If I remember right it the figure in the adverts was £84 a week. This seemed pretty good in the 70's, it's gone up rather since then mind.

Yes, the omission of flying pay from pension has always been a sore in the side of aircrew. The taxpayer has had a very good deal out of it but the aircrew who grew into their enhanced salary have had to cope with a pension that is nothing like a final salary scheme.

A better description of the aircrew pension would be a part final salary scheme.

Chekcy Barsteward Aiudu ;)

8-15 and others

On the extract you produce from SJ, seems to me he is deploring the waste of taxpayers money by the.....public sector.

Kinda treads on your point rather than supporting it.

On a wider note, people such as myself (who worked for a long time in the Armed Forces AKA public sector) get bent out of shape, not so much by the harping on about the paucity of the armed forces lot, but as by the constant comparison with other sectors. Operational under resourcing is out of order...full stop. But like it or not, the pay, conditions and pension arrangements for the armed forces, and almost all the rest of the public sector, are vastly better than the rest (majority) of the working people of the UK.

Read Doctor Cruces post re civil servants and council workers...real people doing real jobs and often worse off overall then many in the Armed Forces (I know "should have done better in school" yawn).

When you collectively slag off "the private sector" you encompass half the working population of the UK who work in small business (and that now includes me). Pay rates are half the UK average in this sector; holidays are the UK minmum (24 days per year) and pensions are frankly unknown.

So if you must blow off about the lack of money, resources whatever, it would nice if you could do so without throwing a collective onslaught at millions of people, most of whom support you fully and all of whom you are paid to serve.

I wonder how many ex ORs who didn't reach complete a 22 year pensionable engagement claim the pension they are entitled to at age 60. I bet the government is sitting on a lot of unclaimed money. HMG doesn't tell you about it, it is up to the individual to claim.

A mate who completed 13 years and left as a Junior Technician in 1975 now gets £250 a month. He claimed it a year too late but got it backdated.:ok:

Armed Forces Pension Scheme (AFPS)

TOFO, thanks for engaging. Please accept my apology I do not mean to collectively slag off all those who work in the private sector, nor everyone who leads companies in the private sector, but that select and significant minority (typified by the CBI) who continually trumpet a private good, public bad message. Although I admit the tone of my previous posts are far too sweeping!

However, what Simon Jenkin was getting at (I think, (my) previous posts are an indicator of poor performance) is that the privatisation mentality is what is effecting public services. Even in public services where privatisation has not occured, the 'consultants' have been in and enforced changes on public organisations. There are some things that should remain public and other services that are better in the private sphere, I feel that too many services that should be public are now private (look inside the Education, Health and Defence depts) and although initially these services are cheaper, over time they get more expensive (when public capacity to perform the role is gone) and the service is rarely better, or indeed as good and hence end up costing a whole lot more, to all taxpayers.

The doctrinaire approach of some Captains of Finance and Industry have caused this current crisis and I fear the 'more of the same' calls by groups such as the CBI are going to make it much, much worse.

Finally TOFO I apologise (again) for 'blowing off' at millions of hard working people in the private sector they are indeed the people we are paid to serve. Perhaps it's that sentiment of collectivism that my more specific target from the previous paragraph need to adopt.

BTW - Where is my award, you didn't send it by TNT did you??

DC-Please be careful about old 'facts' and new ones. You are wrong in your assumption about 'free rent, coal, elec' etc-that is an assumption often quoted but is factually innaccurate. It may have been the case of old, in some locations throughout the world on an irregular basis-but it is certainly not the case now-people in often appauling Service accomodation even pay council tax, you may be surprised to hear. Serviceman on the whole pay a 'market rate' rent and all their own bills nowadays-indeed it is actually quite expensive given the often frequency of enforced family moves. You therefore need to enlighten yourself of facts rather than hearsay.

As to your other point about 'knocking' others within another public Service I agree with you. One of the myriad of reasons I left the Service after almost 24 years was the demoralisation of all public services, and especially those on the RAF. Not helped by the in fighting for money between those services, it is an easy get out clause to blame individuals and their Ts & Cs for the lack of strategic, thoughtful and targeted investment and management. An easy example is one of extracting a half col and his guys from a nasty place, when a 'programmed delay' of repatriation annoyed him considerably. Suffering from 'small man syndrome', he protested viamently, explaining that he was about to be promoted, 'threatening' to write and complain to the CAS, or even CDS as he was an RAF chap! After being educated about the fact that the airbridge was controlled and planned by a joint team, led by a brigadier he was shocked and shut up.(I would like to believe that he acted with the best of intentions, wanting to get his guys back to blighty in a timely manner-but speaking to another of his senior guys that may be a bit generous!).
The point is, finally(!), that it is often too easy to get irate at the 'coal face' and blame the immediate environment (ie people) involved. Consider the environment that those of our public servants have to work in, including the broken system with which they have to work (all too often overworked and underpayed and with great dedication-as has been demonstrated by those civil Servants that worked for me at one time!). I personnally believe that those working at the pension 'place'(wherever that is!) and Xafinity do a good job, given the scale and resources to complete it.

PS What about the removal allowance(not including expense's-which is on top of that!!!) that civil servants get?-at last count it was worth about 5000 quid per move.(1995 ish)....:O

I left as a JT in 1971 after nine years (plus 2 before reaching age 18) but as far as I'm aware I have no pension entitlement as the rules back then said pensions were only payable on completion of 22 years service. I know there is a group who have been fighting to get this changed but without much success.

Apparently parliament cannot change it retrospectively although I hear they managed to do it for MPs?

:(