Royal Mail's pension blunder will cost me £77 every month

[TrueBlueTerrier]

http://www.thisismoney.co.uk/money/expe ... -loss.html" onclick="window.open(this.href);return false;

P.A.F.writes: At the age of 70, I have been informed by Royal Mail Pensions that I have been overpaid for five years, and am liable to repay £77 per month. It has given the reason as ‘maladministration’. It claims I was notified that my job pension would be reduced when my state pension began. I never received such a letter.

Surely, if it was sent, officials were aware that a reduction was due and it was their responsibility to carry it out?

This is a double hammer blow by Royal Mail Pensions. It was bad enough that you were told you had been overpaid to the tune of £4,619 and that the pension scheme expected you to repay this.

But to make matters worse, when you appealed, the head of the scheme sent a poorly worded letter that upheld your complaint, admitted there had been maladministration for years and offered £50 compensation. You read this with relief, believing the debt had been cancelled, but a week later a further letter made clear that the debt stood and would be collected by taking £77 a month off your pension.

Since employees cannot calculate their own pension entitlement, I asked Royal Mail why its scheme should not bear responsibility for its own incorrect arithmetic.

Technically, the scheme has been the responsibility of the Government’s Cabinet Office since 2012, in a move to take financial liabilities away from the business, so the reply came in a joint statement from both. They insist that writing off the overpayment ‘would negatively impact the overall scheme’.

But the better news is that they have cut the repayments to £109 every three months, instead of £77 a month, and you have told me you are happy with this.

[fishtank]

They insist that writing off the overpayment ‘would negatively impact the overall scheme

Since the scheme no longer has any assets and is just one huge Government liability like any other public pension scheme that's a bit of a lie.

As it stands the Government owes us £32billion, If they had written this off they would have owed us £32 billion and a tiny bit.

[RobertT]

It claims I was notified that my job pension would be reduced when my state pension began. I never received such a letter.

The exact details of why he was overpaid are unclear but it sounds to me as if he was a member of Section C and so received the pension supplement for longer than he should have?

I’m not condoning the mistake by RM pensions but every annual statement says that the supplement ceases when you reach state pension age, so I can’t really see how he can say he knew nothing about it.

By law he has to pay it back, simples.

[windermeredave]

I`m not clear on this, why would his RM pension be reduced on reaching state pension age? is this a common thing? bloody well hope not, I`ve been drawing mine for 3 and half years and am due to get my state pension next year

[RobertT]

I`m not clear on this, why would his RM pension be reduced on reaching state pension age? is this a common thing? bloody well hope not, I`ve been drawing mine for 3 and half years and am due to get my state pension next year

Members of Section C of the final/average salary scheme, so those who joined the pension after April 1987 but before April 2008, receive a ‘pension supplement’ between retiring from RM and reaching state pension age. When they get to SPA the supplement should stop.
However, if you take your pension and carry on working for RM until SPA you won’t qualify for the supplement.

Section A/B members and those who are part of the RM Defined Contribution pension won’t get the supplement at all.

Info regarding the pension supplement for Section C members is in the plan guide which you may have a copy of at home or can be downloaded here:
http://royalmailpensionplan.co.uk/55/pensions-brochures" onclick="window.open(this.href);return false;