Those following the highly complicated story of the estimated 11 million who have lost extra pension payments because they are no longer entitled to a guaranteed minimum pension uprating every year after the new state pension was introduced in 2016 have received a further blow.
Despite further pressure for an explanation from the House of Commons Works and Pensions Committee Peter Schofield, permanent secretary at the DWP, has ruled that no further action to inform people is necessary.
The people affected were a large but distinct group. They were people who were contracted out of SERPS by their employer but were told they would receive an index linked guaranteed minimum pension. This arrangement was scrapped when the new state pension was introduced in 2016 for anyone in the private sector – but remains for public sector workers.
The money they have lost is anything from a few pounds a week to tens of thousands of pounds over the lifetime of their pension. This decision was never debated in Parliament or included in the Pensions White Paper. Just as with the 50swomen and divorcees, women are the most affected.
Two people complained to the Parliamentary Ombudsman and won £1250 compensation between them for maladministration. Given the numbers involved you would have thought many more would have got compensation. In fact no one else has.
This is not surprising given the DWP ignored the remedy the Ombudsman suggested and put out a factsheet on their site without even an accompanying press release to say it had done it. The factsheet can be found here.
The Commons Work and Pensions Committee took it up with Peter Schofield, the DWP’s permanent secretary, and pressed for an explanation. The MPs have now got it.
The reply from Peter Schofield is here. He explains the factsheet was deliberately tested on people who did not know anything about pensions to prevent bias and 6,922 had viewed it. He claims that 57 per cent of people who saw it said it was ” useful”. Presumably 43 per cent thought it wasn’t.
Just five people put in a claim and none got it
When it comes to inquiries triggered by the website you can count them on one hand. Just five people, none of them eligible.
The DWP explanation why they believe this does not matter is to say the least interesting. He claims that the transitional arrangements for the new pension mean that someone could gain an extra £38.42 a week -presumably referring to the triple lock.
But the triple lock refers to everybody’s pension – it is not just for those who were contracted out. Also it is not a triple lock at the moment – as 12 million pensioners have lost out by not including the higher rise in earnings. And I notice Rishi Sunak, the Chancellor, did NOT reaffirm it was coming back for next year’s pension rise at the recent spring statement. In fact he didn’t mention pensioners at all.
A DWP spokesperson said in response to my story:
“We encourage anyone who is concerned to read the online factsheet and contact us if they think they have been affected.
“The publication of the factsheet is the final step in the Department meeting the Ombudsman’s recommendations on this issue.”
All this to me has wider implications -particularly for the 50swomen still hoping for compensation via the Ombudsman route. The exercise on GMP pensioners resulted in victory for the two complainants who proved there had been maladministration. But not one other person got any money – a complete failure for the Ombudsman.
Bad news for the 50swomen wanting pension compensation
It would be like the six 50swomen complainants over maladministration getting compensation but the DWP devising a way of ensuring the rest of the 3.8 million get nothing.
There has been much talk from some MPs and campaigning groups claiming the women are entitled to £10,000 or payments of up to £20,000. At the moment that is just wishful thinking because it depends on the willingness of the DWP to pay out. The case illustrated by those entitled to compensation for losing their GMP indexation shows the DWP has no intention of doing so if it can get away with it.
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