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Govt faces £550m bill over botched pension calculations

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The Government has made provisions worth over half a billion pounds after commutation errors led to thousands of emergency workers being underpaid pensions.

Home Office accounts published in July show the department has set aside £460m to compensate retired police officers.

In addition, the Department for Communities and Local Government expects to pay firefighters £94m, the Mail on Sunday reports.

The payout follows a decision in May this year by the Pensions Ombudsman to award fireman Billy Milne £36,000 after the Government Actuary’s Department failed to update commutation tables.

Milne and others who retired at the same time received lump sum payments based on old calculations.

The decision means every other firefighter and police officer who retired with a lump sum between 2001 and 2006 could receive a payout.

About 5,000 firefighters and 29,000 police officers are eligible, according to the Mail.

Former pensions ombudsman Tony King said at the time: “In theory every one of those retired members could complain to the Pensions Ombudsman Service.”

He added: “I have every hope and expectation that GAD, the Department and all other interested bodies, including those representing fire and police authorities, will swiftly jointly consider what steps should be taken to ensure that further determinations are not necessary.

“That may involve discussion as to where liability lies, particularly as following the division of liability above is likely to be administratively burdensome. However, the particular public sector pocket or pockets used to make payments from is of no significance to the members.

“So I strongly recommend that the question of where liability ends up should be regarded as secondary to the members receiving as soon as possible such payments as they will be due.”

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Pension Wise — now taking calls…

Those with decent-length memories will recall that in the 2014 Budget statement George Osborne announced the new (and entirely unexpected) pension freedoms. The new rules come fully into force in less than two weeks.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. So before the Government look at the FCA pension problems they should look at themselves too!

    • Andy Robertson-Fox 13th July 2015 at 11:38 am

      Over half a million frozen pensioners have been telling successive governments over the last sixty plus years they should look at themselves too but over the discriminatory policy incorporated in their own State Retirement Pension Scheme.
      Simply, even if one has contributed to the NI Fund like everyone else during one’s working life if one retires to the “wrong” country, like for example, Australia, Canada and Thailand there is no index linkıng…0% increases year after year after year…but in the UK, an EEA country and even the USA uprating under the triple lock is automatic..
      But now the decisıon has been made the government will “find” the money to meet its debt to the Firemen and Policemen but it will still claım, even though no back money is ınvolved, and as did DWP Minister in the Lords, Lord Freud, that where it is about frozen pensions “it is all about money” and not affordable.

  2. So the government falls foul over its own tinkering ?

    I cant pin point the moral of this article, but all I can say is……. why ?

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