DSS computer fails to cope with pension pay-outs

Pensioners are losing out - thanks to a bug in the DSS system.

HOW MUCH is your pension worth? You don't know? Neither does the DSS, the agency which is responsible for paying retirement income to millions of people every week.

Problems at the central DSS computer has resulted in hundreds of thousands of the newly retired not receiving the pensions due to them. The chaos, with its overtone of creaking Orwellian inefficiency, has thrown a spotlight on just how powerful this single piece of technology is, and how it influences so many people's lives.

What have been described as "teething problems" with a new pounds 100m computer has resulted in chaos, leaving one in three pensioners who retired since last April being short-changed on their entitlements.

Although in theory the basic state pension could be hit, because almost everyone retiring from full-time employment receives the full state pension nowadays, the system has mainly coped with this sum.

However, its technical wizardry completely floundered when the time came to calculate the additional State Earnings Related Pension top-up (Serps), which many people have been contributing towards throughout their working lives.

Some people have been short-changed by many pounds a week for nearly a year, and it will take more time still to resolve the problem.

Many widows have failed to receive their due widows pensions, and anyone involved in a divorce will also have found their pensions affairs in a muddle. But it is not only the retired who have been hit.

National Insurance rebates into private pensions have all but collapsed, which means that these investments missed out on last year's strong stock market performance.

But most worrying of all is the difficulty in establishing whether you have received the correct pensions and other benefits due, or whether you are among those losing out.

Independent actuary Bryn Davis said: "The calculations involved in working out your pension rights are not very difficult. The big problem is getting hold of the records.

"The DSS computer is the only agency holding records about your earnings and National Insurance contributions going back over the years. We are all utterly dependent on it. And it doesn't work."

In a less-than-magnanimous gesture, Alistair Darling, the Social Security Secretary, announced this week that everyone affected will be compensated by a one-off payment of pounds 10.

The computer problems suffered by so many underline the wisdom of keeping and filing old pay-slips, particularly P60s which record your pay, tax and National Insurance in any given year. Only with this evidence can you challenge the Department of Social Security over how much they pay you in retirement by way of Serps.

However, if you have saved these documents and you can use a calculator, you can work out the sums - although this can be both confusing and complicated. It is probably more practical to contact your local DSS office and ask staff there to explain how they have reached the calculation they are paying you - supplying them with the information you have.

Similarly, anyone who has expected Serps rebates to be paid into their private plan should contact their pension provider and ask them for a statement - except your insurer will be unable to tell you whether the DSS refunds have been made correctly.

The biggest problem with Serps rebates centres on age-related rebates which were made for the first time for the year 1997-1998, and should have been paid into your pension during the 1998/1999 tax year.

The computer couldn't handle the calculation and these payments have not been made. In this case, the Government is promising to pay 0.5 per cent for each month of delay, amounting to 6 per cent over a year. But many people saving towards their pensions will find this inadequate given that, despite the uncertainties of the past year, the FTSE 100 share index rose by 18 per cent last year.

A spokesman for Scottish Mutual said: "The first port of call has to be your pension provider, but he won't be able to tell you for sure whether an adequate rebate has been paid, because we don't know how much you earned.

"Although the problem has only recently come to light it was clear that something wasn't working, because the money we have received from the DSS over the past 12 months has been well down on previous years."

FILE AS YOU EARN

How to stay one step ahead of the state:

l Always keep all records relating to pay and National Insurance contributions - one day you may find that you need them.

l Ask the DSS to explain how your pension benefit has been calculated.

l If you are unhappy, consider paying an independent actuary to check the DSS's sums. He may only levy a small fee, but it will be worth it to get your pension right.

l Ask your pension provider for a statement detailing exactly what has been paid into your plan in the past year.

l Ask your wages office to calculate what the rebate should have been. They can easily do the sum.

Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
Sport
The Pipes and Drums of The Scottish Regiments perform during the Opening Ceremony for the Glasgow 2014 Commonwealth Games at Celtic Park on July 23, 2014 in Glasgow, Scotland.
Commonwealth GamesThe actor encouraged the one billion viewers of the event to donate to the children's charity
Sport
Karen Dunbar performs
Entertainers showcase local wit, talent and irrepressible spirit
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Life and Style
ebookA wonderful selection of salads, starters and mains featuring venison, grouse and other game
Life and Style
fashion Designs are part of feminist art project by a British student
News
Very tasty: Vladimir Putin dining alone, perhaps sensibly
news
Life and Style
Listen here: Apple EarPods offer an alternative
techAre custom, 3D printed earbuds the solution?
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
books
News
Joining forces: young British men feature in an Isis video in which they urge Islamists in the West to join them in Iraq and Syria
newsWill the young Britons fighting in Syria be allowed to return home and resume their lives?
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
News
i100
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
News
Bey can do it: Beyoncé re-enacts Rosie the Riveter's pose
newsRosie the Riveter started out as an American wartime poster girl and has become a feminist pin-up. With Beyoncé channeling her look, Gillian Orr tells her story
Life and Style
Donna and Paul Wheatley at their wedding
healthShould emergency hospital weddings be made easier for the terminally ill?
Arts and Entertainment
Residents of Derby Road in Southampton oppose filming of Channel 4 documentary Immigration Street in their community
tv
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs General

    BI Manager - £50,000

    £49000 - £55000 per annum + competitive: Progressive Recruitment: My client is...

    BI Project Manager - £48,000 - £54,000 - Midlands

    £48000 - £54000 per annum + Benefits package: Progressive Recruitment: My clie...

    VB.Net Developer

    £35000 - £45000 per annum + competitive: Progressive Recruitment: If you're pa...

    SAP Business Consultant (SD, MM and FICO), £55,000, Wakefield

    £45000 - £55000 per annum + competitive: Progressive Recruitment: SAP Business...

    Day In a Page

    Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

    Screwing your way to the top?

    Good for Lana Del Rey for helping kill that myth, says Grace Dent
    Will the young Britons fighting in Syria be allowed to return home and resume their lives?

    Will Britons fighting in Syria be able to resume their lives?

    Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
    Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

    Beyoncé poses as Rosie the Riveter

    The wartime poster girl became the ultimate American symbol of female empowerment
    The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

    The quest to find the perfect pair of earphones

    Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
    Climate change threatens to make the antarctic fur seal extinct

    Take a good look while you can

    How climate change could wipe out this seal
    Should emergency hospital weddings be made easier for the terminally ill?

    Farewell, my lovely

    Should emergency hospital weddings be made easier?
    Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

    Crowdfunded novel nominated for Booker Prize

    Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
    Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

    Vladimir Putin employs a full-time food taster

    John Walsh salutes those brave souls who have, throughout history, put their knives on the line
    Tour de France effect brings Hollywood blockbusters to Yorkshire

    Tour de France effect brings Hollywood blockbusters to Yorkshire

    A $25m thriller starring Sam Worthington to be made in God's Own Country
    Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

    Will The Minerva Project change the face of higher learning?

    The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
    The 10 best pedicure products

    Feet treat: 10 best pedicure products

    Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
    Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

    Noel Fielding's 'Luxury Comedy'

    A land of the outright bizarre
    What are the worst 'Word Crimes'?

    What are the worst 'Word Crimes'?

    ‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
    Can Secret Cinema sell 80,000 'Back to the Future' tickets?

    The worst kept secret in cinema

    A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
    Facebook: The new hatched, matched and dispatched

    The new hatched, matched and dispatched

    Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements