19 December 2008
By Tash Shifrin The government will write off the £126m cost of pensions overpayments made to former public sector workers, ministers said this week. Errors had been made in payments over 30 years to around 5% of pensioners in schemes for civil servants and other public sector workers, Cabinet Secretary Liam Byrne said in a parliamentary statement on December 16. The problems began in 1978 when the schemes contracted out of the State Earnings Related Pensions Scheme, as a result of incorrect indexation of the Guaranteed Minimum Pension element, Byrne said. Around 95,000 members of the five schemes, along with up to 1,800 former police officers, are affected across England and Wales, plus 8,200 pensioners in Scotland and Northern Ireland. The pensioners face cuts in payments or a reduction in their expected inflationary increase from April. But Byrne said it was ‘unlikely to be cost-effective to attempt recovery’ of the overpayments already made. Byrne said there was ‘no single cause’ behind the problem. ‘I have asked the National Audit Office to carry out a review of the end-to-end process to pinpoint accountabilities, and the House will be updated further,’ he said. The row blew up as the CBI urged the government to probe public sector pension costs, which it said were ‘running up a trillion-pound tab’. It called for an independent commission to examine public sector pensions, which it claimed had unfunded liabilities of more than £915bn. CBI deputy director general John Cridland said: ‘The debt that is being racked up is truly eye-watering and is set to get much worse.’ Public and Commercial Services union general secretary Mark Serwotka said: ‘Many of our members will retire with pensions worth less than £4,000 a year. These are not the gold-plated pensions some would have us believe.’
PFdec2008
