GMP reconciliation reveals £22m of overpayments in civil service pension scheme

Thousands of civil service pensioners are facing uncertainty over their future pension payments today, as the scheme’s Guaranteed Minimum Pension (GMP) reconciliation exercise revealed £22m of overpayments.

The scheme’s annual report, published in December, said the pension payments will be corrected going forward, and a decision was taken in October 2017 to write off the historic overpayments as a loss.

“Work on the GMP reconciliation exercise, required as a result of the end of contracting out in 2016, continues. MyCSP has raised almost 200,000 queries (out of a possible 360,000) with HMRC for pensioner and deferred members. The review concluded that an estimated £22m of overpayments have been made; these will not be reclaimed, consistent with the approach across the rest of the public sector,” the report stated.

It further noted that HMRC has provided a file for active members, and MyCSP, which manages the scheme, is now in the process of analysing and matching these members before commencing reconciliation.

“Preliminary work is under way to establish a process to correct member records using the results of the reconciliation exercise. This rectification exercise will commence in June 2018,” it said.

Despite the scheme writing off the overpayments as a loss, the union Prospect is warning that members could still face reductions in their future income as pension payments are corrected. Prospect deputy general secretary Garry Graham said: “The decision to write off the past overpayments is the correct one. The errors were made by the scheme and there was no way members could have been expected to realise they were being overpaid.

“However the proposed reductions in future pension income will cause real hardship as members’ expectations are based on the level of pension they thought they were entitled to. The scale of the overpayments in the civil service pension schemes alone suggests that hundreds of thousands of members might be affected across all schemes. Some private sector schemes may seek repayment of past overpayments. Prospect will support any members faced with demands of this kind."

MyCSP declined to comment on the issue stating it is a matter for the Cabinet Office.

Pensions Age has contacted the Cabinet Office but is still awaiting a response.

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