NPS pensions in chaos

Crossing the Bridge ICCJ Monograph 10
27/06/2018
Family court focus
27/06/2018

NPS pensions in chaos

pension concept shown on calculator

As reported recently, the plethora of problems with pensions in the NPS has led to Napo taking the matter direct to Ministers to seek redress.

Last month Napo Magazine reported that Napo has had to register two formal complaints with Pension Regulators against the NPS in the last year and also a formal internal dispute about their systematic failure to manage ill health early retirement in accordance with scheme rules and regulations.

The problems impact most on vulnerable staff seeking early retirement on health grounds and those on lower pay, for example staff working irregular hours e.g. in Approved Premises, and those who retired in-year. Between 2014 and 2016, the NPS did not keep a list of staff who retired or left the service in year.

Examples of the chaos include:

  • Systematic failure to accurately calculate and collect pension contributions for LGPS members, especially those whose pay changes – for example due to taking maternity leave, being on sick pay, or reduced hours. In 2017, more than 3000 staff had no contributions collected for up to 7 months.
  • Taking an average of 6 months to progress an IHER application when the expectation is up to 12 weeks, leading to unnecessary loss of income for staff by prolonging sickness absence.
  • Additional delays in starting IHER application processes even where it is obvious of the need to do so. In one case, where a member had a massive stroke their husband was initially told by the line manager to sort it out themselves as “we don’t do IHER any more”. It took more than 12 months from her stroke to secure IHER and even now we don’t know if her payments are accurate.
  • People qualifying for IHER but employers not actioning the release of their pension for months, causing additional distress, financial hardship.
  • People being given the wrong advice around appealing an IHER outcome – in several cases being told they couldn’t appeal until they accepted the outcome, a tautological nonsense.
  • People being asked to sign away unrelated statutory rights before they can access their pension – in breach of pension regulations.
  • Additional enrolment challenges for staff joining the NPS. A small number have been wrongly enrolled in the civil service scheme, leading to difficulties recovering contributions and transferring these into the LGPS. In 2017, 350 staff joining the NPS were not paid at all for up to 3 months, with some having subsequent difficulties joining the LGPS in a timely manner.

Meanwhile, calls to the Shared Service Centre continue to be charged at a premium rate of up to 88p a minute – meaning people trying to sort out these problems (including vulnerable staff on reduced or zero pay) running up significant phone bills or the taxpayer being charged to phone the government’s own HR department!

The scale of these problems and the lack of engagement from the employer, and resultant lack of progress, means we are now seeking the direct intervention of Ministers.  Napo has now produced a comprehensive briefing on the pensions’ chaos, including a list of requirements to rectify the situation and advice for members. This is available on the Napo website www.napo.org.uk

 

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