Breach of pension laws reported after error with Flintshire Councils payroll system sees almost 800 receive incorrect payments

A breach of pension laws has been reported to a regulator after payments to almost 800 people were wrongly calculated.

The manager of the Clwyd Pension Fund, which covers Wrexham, Flintshire and Denbighshire, has notified The Pensions Regulator following an error in information provided through Flintshire Council’s payroll system.

To date the local authority has carried out recalculations regarding what is known as assumed pensionable pay (APP) for 1,216 people, who are currently working, or previously worked for the council

So far, it has identified inaccuracies for 780 of them and members affected have had a collective reduction in their pensions of approaching £25,000 per year.

According to a report by fund manager Philip Latham, the largest individual reduction for a single member was £115 per year, while most pensioners have seen a drop of under £25 on average.

Representatives from both the Clwyd Pension Fund and Flintshire Council’s payroll department said they were investigating the issue.

Mr Latham said: “Unfortunately the employer liaison team discovered that the APP figure being extracted from Flintshire Council’s iTrent payroll system is incorrect for some members.

“It appears that the issue has affected APP since the new CARE scheme was introduced from  April 1, 2014.

“At the last meeting we notified that there were potential pays for investigating of 2,465 up to end of January 2019, relating to 1,458 scheme members but that not all will transpire to be incorrect.

“Until all the cases have been worked through we cannot be precise about the actual number of members affected or the financial impact.

“However as at the point of writing, the net overall impact on pensions across all scheme members is minus £24,500 per annum.”

More than 800 people have now been notified, either of a change to their benefits or confirming they have been checked and are correct.

APP refers to cases where someone has had a period of reduced pay, child related leave, or sick leave, and a notional figure is used to calculate pension payments instead.

A report going to backbench councillors states that no complaints have been received about the problem as yet, although nine phone calls have been made by those affected.

Mr Latham said the payroll issue was still ongoing and causing pressure on the fund’s administration team.

He added: “The additional work is continuing to have a major impact on internal resources, both within the Clwyd Pension Fund employer liaison team and operations team.

“Business as usual is being affected, and will continue to be affected, until the project is fully concluded.

“The current target completion date for this project is the end of March 2019 to allow for the remaining cases to be finalised and a satisfactory solution to the underlying iTrent to be put in place.”

Mr Latham made a formal report to The Pensions Regulator regarding the breach in July last year.

Officers from the fund have since been required to share updates with the regulatory body, which is said not to have suggested any changes to their plans to address the issue.

Members of Flintshire Council’s Clwyd Pension Fund committee will receive an update on the issue at a meeting next week.

By Liam Randall – Local Democracy Reporter (more here).