Overpayment Errors To Blame for UK Pensioner Cuts
The biggest data-checking in UK’s history revealed that due to poor record keeping, accounting errors, and missing documents, over 40 years of pensions were overpaid to tens of thousands of retirees dating back to the 70s.
The massive data review involved thousands of public and private sector retirement pension plans. The government asked them to review records of millions of workers who contracted out and paid less national insurance contributions.
In consequence, doing so gave them smaller state pensions upon their retirement. Their outside pension contracts are the Guaranteed Minimum Pension (GMP) their employers offered to them. Most companies ask their employees to use the GMP to maximise their partnerships with pension funds.
As a result, many of the agencies found discrepancies. The UK Civil Service Pension Scheme with one million members found about £22 million in overpayments due to GMP errors. Another private sector fund saw about 10,000 to 15,000 members with both overpayments and underpayments.
According to UK Minister of State for Pensions Steve Webb, if the company GMP paid you is “greater than previously thought,” referring to the data checks, then your state pension is ultimately reduced. The Department for Work and Pensions said individuals “will not pay any overpayments” but will have to prepare for any state pension reductions.