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.

Have you tried new the Independent Digital Edition apps?
Life and Style
ebookNow available in paperback
ebooks
ebookPart of The Independent’s new eBook series The Great Composers
News
Nick Clegg on the campaign trail in Glasgow on Wednesday; he says education is his top priority
peopleNick Clegg remains optimistic despite dismal Lib Dem poll ratings
Arts and Entertainment
Déjà vu: David Tennant returns to familiar territory with Anna Gunn (‘Breaking Bad’)
tvReview: Something is missing in Gracepoint, and it's not just the familiar names
Arts and Entertainment
Buttoned up: Ryan Reynolds with Helen Mirren in ‘Woman in Gold’
filmFor every box-office smash in his Hollywood career, there's always been a misconceived let-down. Now he says it's time for a reboot
News
people
News
Actress Julianne Moore wins the Best Actress in a Leading Role Award for 'Still Alice' during the 87th Annual Academy Awards in Hollywood, California
people
Sport
Ross Barkley
footballPaul Scholes says it's time for the Everton playmaker to step up and seize the England No 10 shirt
News
'We will fix it': mice in the 1970s children’s programme Bagpuss
science
Life and Style
2 Karl Lagerfeld and Choupette
fashion
  • Get to the point
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

    Recruitment Genius: Bookkeeper

    £23000 - £28000 per annum: Recruitment Genius: This fast growing boutique prac...

    Recruitment Genius: Customer Service Executive

    £18000 - £22000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: Retail Buyer / Ecommerce Buyer

    £30000 - £35000 per annum: Recruitment Genius: Working closely with the market...

    Recruitment Genius: Sales Executive - CAD Software Solutions Sales

    £20000 - £50000 per annum: Recruitment Genius: A reputable company, famed for ...

    Day In a Page

    War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

    War with Isis

    Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
    Scientists develop mechanical spring-loaded leg brace to improve walking

    A spring in your step?

    Scientists develop mechanical leg brace to help take a load off
    Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

    Peter Ackroyd on Alfred Hitchcock

    Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
    Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

    Ryan Reynolds branches out in Woman in Gold

    For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
    Why Robin Williams safeguarded himself against a morbid trend in advertising

    Stars safeguard against morbid advertising

    As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
    The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

    UK horticulture industry facing skills crisis

    Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
    Hack Circus aims to turn the rule-abiding approach of TED talks on its head

    Hack Circus: Technology, art and learning

    Hack Circus aims to turn the rule-abiding approach of TED talks on its head. Rhodri Marsden meets mistress of ceremonies Leila Johnston
    Sevenoaks is split over much-delayed decision on controversial grammar school annexe

    Sevenoaks split over grammar school annexe

    If Weald of Kent Grammar School is given the go-ahead for an annexe in leafy Sevenoaks, it will be the first selective state school to open in 50 years
    10 best compact cameras

    A look through the lens: 10 best compact cameras

    If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
    Paul Scholes column: Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now

    Paul Scholes column

    Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now
    Why Michael Carrick is still proving an enigma for England

    Why Carrick is still proving an enigma for England

    Manchester United's talented midfielder has played international football for almost 14 years yet, frustratingly, has won only 32 caps, says Sam Wallace
    Tracey Neville: The netball coach who is just as busy as her brothers, Gary and Phil

    Tracey Neville is just as busy as her brothers, Gary and Phil

    The former player on how she is finding time to coach both Manchester Thunder in the Superleague and England in this year's World Cup
    General Election 2015: The masterminds behind the scenes

    The masterminds behind the election

    How do you get your party leader to embrace a message and then stick to it? By employing these people
    Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

    Machine Gun America

    The amusement park where teenagers go to shoot a huge range of automatic weapons
    The ethics of pet food: Why are we are so selective in how we show animals our love?

    The ethics of pet food

    Why are we are so selective in how we show animals our love?