‘I can’t retire’: Public sector pension fund goes into meltdown (2024)

Pensioners have been left without incomes for months on end after one of the largest public sector retirement funds in the country went into meltdown.

Members of the West Midlands Pension Fund (WMPF), including former school workers, have been left unable to access their money and some have been forced to delay their retirements following a computer system upgrade in July 2023, which has caused delays to a string of vitalprocesses.

Whistleblowers said the upgrade had been rushed, and that the new system did not have the capabilities of the older portal, meaning key procedures such as paying out to newly retired members had been impacted.

Members said the delays were a “disgraceful shambles” and had meant that they were relying on family members to pay their bills.

Others said they have been left struggling with their mental health following months of waiting for the fund to pay out their pensions.

Insiders have shared data with The Telegraph which lays bare the extent of the issues.

The pension fund, which counts more than 350,000 members, is part of the Local Government Pension Scheme.

The fund typically processes 8,000 new retirees’ pensions every year, with members including the employees of more than 800 public sector organisations, including police forces and fire services.

However, the IT update caused a backlog of problems. As of November 2023, there were 16,750 amalgamations, 7,615 deferments, 2,644 retirements and 704 deaths of members outstanding, the data show.

The average number of retirements being processed daily before the new IT system was implemented was 33.24. After the system was introduced, this dropped to just 9.61 daily.

Refunds, which were being processed at a rate of 28.84 per day before the new system was introduced, fell to just 4.48, while the number of deaths processed daily dropped from more than 14 to just 6.621.

Some 2pc of active members of the scheme are waiting for pension payments to begin, a freedom of information request revealed earlier this month.

The pension fund, which said itsprocessing numbers had since improved, now has an average rating of just 1.3 stars on the review website Trustpilot, following a slew of affectedmembers complaining about the backlogs.

One insider at the scheme said the fund’s management had become “top-heavy”due to over-promotion in the public sector organisation, adding that there were not enough staff to do the work required to clear the backlogs.

They said: “That’s why they’ve taken down the phones to only a few hours per day, because all of the staff are new. It’s a constant turnover of staff at administration level.”

Members can call the pension fund between 9am and 12pm, and 2pm and 4pm, Monday to Friday. The phone lines closed for two weeks during the Christmas period.

The new system does not have the technical capacity of the old portal, whistleblowers explained.

The previous system allowed deferred members to receive an early retirement pension quote immediately, but the new Compendia system, provided by the technology company EQ Retirement Solutions, does not.

One deferred member, who asked for a pension estimate for if they retired in April this year, was told that they would have to wait until April to ask for a quote, and that it would then take 10 weeks for a response.

‘I couldn’t buy my grandchildren Christmas presents’

One widow, who worked for 15 years as a school cook, retired once she reached state pension age in December.

But despite having submitted her paperwork for a pension quote at the end of October, she said she has not received any communication from the pension fund.

She said: “Naively I thought I would be retiring with my pensions. It didn’t come, so I rang them, and they just keep throwing you off.

“When you ring, they tell you that they’re running behind and that there was a timescale of six weeks. Then the next time I rang, it was six to eight weeks. Then it was eight to 10 weeks.

“When I rang the very last time, they told me it was 10 to 13 weeks. So it’s getting longer.”

The former cook said even putting in a complaint had not sped up the process. She is having to live on the state pension, and her son is paying her bills.

She added: “I haven’t bought Christmas presents for my seven grandchildren, thinking I was going to get my pension. They’ve ruined my retirement and they have ruined my Christmas.”

A 72-year-old school business manager, who retired in August 2023, said she had been forced to live off her state pension since she gave up work.

She said she had lost count of the number of calls she had made to the fund, and that she is worried about where her money is.

She said: “The system is obviously not fit for purpose. And where is the money?”

One 66-year-old, who worked for a school in the pension scheme for 23 years, retired at the end of August last year.

She filed her paperwork with the pension fund before the end of June, and was expecting her pension payments to start. But she has been waiting for nearly six months for her money.

She said in an email to the fund chief executive that she feels “unable to make any future plans for my life ahead”. Her savings, which she has been living off, have been depleted, in what she calls a “disgraceful shambles”.

The pensioner, who lives alone, has been forced to go to her doctor over the stress and anxiety that this has caused her, and said she was diagnosed with depression.

Others have cut back on heating their homes and social visits because they are unable to afford them without the payments, families said.

Members of the fund also expressed concern that they would have to delay their own retirements if the issues were not resolved.

One deferred member said he feared that he would become “another victim of what appears to be corporate incompetence”, when he retires in the next eighteen months.

‘The regulator should be all over this’

Former pensions minister Baroness Ros Altmann, said: “For someone who is expecting to receive their pension, and relying on it, it can mean that they have nothing to live on.

“The Pensions Regulator should be all over this. This is something that is a real no-no, as far as the pension industry is concerned.”

“Members are meant to be able to rely on their pension to be paid,” she added.

In a joint statement, Rachel Brothwood, executive director of pensions at WMPF, and Duncan Watson, chief executive of EQ Retirement Solutions apologised for the ongoing delays that members were experiencing, and said that they had “redistributed resources” to gather documentation and expedite priority cases.

They said: “We are also working to provide provisional quotes for members automatically, which will enable members to self-serve and further reduce the number of outstanding cases.

“We are working hard to return to normal service standards as quickly as possible and the steps we are taking today will improve our processing capabilities for members in the medium-term.”

A spokesman for The Pensions Regulator said it was aware of the issues facing the WMPF but declined to comment further.

Introduction

As an expert and enthusiast, I can provide information and insights on a wide range of topics, including the concepts mentioned in the article you provided. While I don't have access to the specific details of the West Midlands Pension Fund (WMPF) mentioned in the article, I can offer some general information about pensions and retirement funds.

Pensions and Retirement Funds

Pensions and retirement funds are financial arrangements that provide individuals with income during their retirement years. These funds are typically funded by contributions from both the employee and the employer, and the accumulated funds are invested to generate returns over time.

Retirement funds, such as the West Midlands Pension Fund, are responsible for managing and administering the pension benefits for their members. This includes processing retirements, calculating pension payments, and ensuring timely disbursem*nt of funds to retirees.

Challenges Faced by the West Midlands Pension Fund

According to the article, the West Midlands Pension Fund experienced significant challenges following a computer system upgrade in July 2023. The upgrade reportedly caused delays and disruptions to various processes, including paying out pensions to newly retired members. Some of the key issues mentioned in the article include:

  1. Delays in processing retirements: The upgrade resulted in a backlog of retirements, with a significant decrease in the number of retirements being processed daily.
  2. Delays in refund processing: The system upgrade also caused delays in processing refunds, affecting the timely return of funds to members.
  3. Decreased processing capacity: The new system was reported to have lower technical capacity compared to the previous system, leading to delays in providing pension quotes and other services to members.
  4. Insufficient staff: The article suggests that the pension fund's management may be understaffed, leading to difficulties in clearing the backlogs and providing timely services to members.

Impact on Pensioners

The delays and disruptions caused by the system upgrade have had a significant impact on pensioners relying on the West Midlands Pension Fund. Some of the reported consequences include:

  1. Financial hardships: Pensioners have been left without incomes for months, forcing them to rely on family members or other sources of support to pay their bills.
  2. Mental health challenges: The prolonged waiting period for pension payments has reportedly taken a toll on the mental health of some pensioners, leading to stress, anxiety, and even depression.
  3. Delayed retirement plans: The issues faced by the pension fund have also raised concerns among members who are planning to retire, as they fear potential delays and disruptions to their own pension payments.

Response from the West Midlands Pension Fund

According to the article, the West Midlands Pension Fund has acknowledged the ongoing delays and expressed apologies to affected members. They have stated that they are working to improve their processing capabilities and have redistributed resources to expedite priority cases. The fund is also exploring options to provide provisional quotes to members automatically, which would allow for self-service and further reduce the number of outstanding cases.

Conclusion

While the specific details and current status of the West Midlands Pension Fund are not available, the challenges faced by pensioners due to the system upgrade are concerning. It is important for pension funds to ensure efficient and timely processing of retirements and payments to avoid financial hardships and emotional distress among retirees. If you or someone you know is affected by similar issues, it may be advisable to reach out to the pension fund directly for updates and assistance.

Please note that the information provided is based on the general understanding of pensions and retirement funds and may not reflect the specific circ*mstances of the West Midlands Pension Fund.

‘I can’t retire’: Public sector pension fund goes into meltdown (2024)
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