MPs challenge Opperman to rewrite guidance for people who lost thousands of pounds in additional pensions

MPs on the Commons Work and Pensions Committee has written to Guy Opperman, the pensions minister, asking him to rewrite the fact sheet on the Gov.uk website so people can properly claim compensation for losing additional pensions worth up to thousands of pounds after the new state pension was introduced in 2016.

Guy Opperman, pensions minister. Pic Credit: Twitter

The action from the committee comes after members of the public complained to MPs that it was virtually impossible to find the advice given in the fact sheet or claim. Not a single person has succeeded in a claim against the Department for Work and Pensions yet possibly 11 million people are entitled to it.

The people affected are 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.

Robert Behrens, the Parliamentary Ombudsman, decided that there was maladministration by the DWP and two complainants got £1250 between them. He recommended that the government publish guidance on how to claim. But ministers ignored his advice and he never bothered to hold the ministry to account for its failure.

Peter Schofield, permanent secretary at the DWP

In March Peter Schofield, DWP permanent secretary on £190,000 a year, wrote to MPs on the committee, saying he had no intention of changing it. You can read the blog on this here.

Now Stephen Timms, the Labour chair of the committee, has written a strongly worded letter to Guy Opperman, asking for it to be rewritten. The full text is here.

Stephen Timms MP chair of the committee

The letter reveals anger among members of the public.

The letter said:” One person pointed out that the factsheet has been placed on Gov.UK in the section on ‘public service pensions’, when it is not in fact relevant to members of such schemes as they have full inflation protection.

“Another told us that they only became aware of it after looking through the correspondence between the Committee and DWP on the Committee’s website. They said “how anyone affected was expected to know it was there I will never know. There was no press release or other publicity to encourage the large numbers of people affected to look at the gov.uk site factsheet.
” Yet another person pointed out that some pension schemes were unaware of the factsheet.

One referred on its website to GMP indexation being partly delivered through ‘increases each year added to your State Pension’, without distinguishing between people who reach State Pension age before and after 6 April 2016.”

Only 19 people used the on-page search function

The analytic review of the factsheet sent to the Committee on 2 March 2022 said, the factsheet had had 6,922 ‘unique page views’, which seems low number given that the Department estimated that 50,000 people would be worse off in 2017-18 alone.13 Only 19 people had used the on-page search function, which is ‘very low’.

The MPs say: “The Committee would be grateful for an explanation of the circumstances in which an individual in the target group for the factsheet may be eligible for compensation and what steps should they take to get it. This should be included in a revised version of the factsheet.”

The letter concludes; ” The Committee is concerned that, now six years on from the NAO report, it is still the case that some people with GMPs negatively affected by the new State Pension reforms “have not been able to find the information they need.” In light of this, will the Department revisit its decision not to review the factsheet and commit to improving its content so that it better meets the needs of those affected and promoting it better? This Committee would be grateful for sight of a suitably revised version of this factsheet before it is published.
“I would be grateful for a response by 8 June.”

The DWP’s official position is “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.”

But MPs are not satisfied and nor should anyone else. So Mr Opperman’s response will be closely watched. To repeat again if this is the way the ministry treats this group of people how are the 3.8 million 50s women who are hanging on for a compensation package from Robert Behrens are going to be vastly disappointed. Note it is SIX years since he recommended compensation for this group and not a single person has got a penny. At this rate the 50s women could be well into their 70s before they get any money or in their graves by then.

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Rip off: DWP to take no further action to compensate millions who lost thousands of pounds of extra pensions

Peter Schofield,permanent secretary at the Department for Work and Pensions

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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