The Pensions Ombudsman is already examining multiple complaints about how the Scottish Government pensions agency has turned the task of compensating retirees into what one campaign leader called “a shambles” with thousands remaining locked out of their nest eggs.
Pensioner campaigners have been enraged by Mr Pathirana’s “unconvincing” explanations, regret and plan to put things right as presented to MSPs in the Scottish Parliament.
An estimated 300,000 Scots police, teachers, NHS staff including nurses, firefighters and local government workers both pensioners and those close to retirement were thought to have been affected by an age discrimination court ruling, with over two thirds of those overseen by the SPPA which is responsible for providing each worker with potential pension compensation.
In Scotland the SPPA had 18 months according to legislation to give pension remedy statements with a statutory deadline of March 31.
The crisis stems from a High Court judgment in 2018, which found the UK government’s 2015 public sector pension reforms had unlawfully discriminated against younger workers. The reforms aimed to cut costs by moving most staff onto less generous schemes, while letting older employees stay on better ones.
Years later, delays and confusion mean over 100,000 Scottish pensioners are still waiting for remedy statements detailing money they may be owed from the debacle, with frustration mounting on all sides.
Dr Stephen Pathirana, chief executive of the Scottish Public Pensions Agency gives evidence at the Scottish Parliament (Image: Scottish Parliament)
Mr Pathirana, who has come under increasing pressure over the crisis, expressed regret when he appeared before MSPs on the Scottish Parliament’s finance and public administration committee saying that 85% of police cases but that firefighters are not expected to start getting remedy statements till the end of this year.
He said: “I’d like to start by acknowledging the impact of delays… and I’m sorry that many of our retired members are still waiting for their choice when they expected to have it by now. While he said they were now making “significant progress”.
He added: “We would like to have been in a place where this was all much, much more progressed. “But the scale of this was not understood by the UK government. It’s hugely frustrating for anybody impacted by the McLeod remedy. And in cases very distressing and I’m deeply sorry for that.
“But we didn’t understand the complexity as an organisation.”
He added: “So I accept, as I sit here owning the problem, and I need to put it right.
But his responses did not go down well with Scottish Conservative shadow social security secretary Liz Smith, who said it was “one of the most concerning evidence sessions that I have sat through as a member of this parliament, because I don’t really think we are getting the answers that we need”.
Pensioner rights campaigner Martin Gallagher said the SPPA chief should go despite public apology (Image: Martin Gallagher)
Retired police superintendent Martin Gallagher, who heads a Job’s Forgotten group of over 500 members to co-ordinate issues for those who are fighting to get their pension remedies, who attended the hearing told The Herald that the SPPA chief should lose his job.
“He has to go,” he said. “He has been responsible for repeated missed deadlines and as Liz Smith MSP said during the session it was one of the most concerning evidence session she had attended. This is very concerning, and shows a complete lack of confidence in his ability to deliver. She said ‘sorry was not good enough’. And I agree.
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“Sorry is not enough as the issues continue. Sorry draws a line under matters when an issue has been resolved. Issues in respect of the police are far from resolved and the session does not provide confidence they will be resolved in the near future.”
One teacher, who is fighting for nearly £30,000 that he says he is owed, added: “Pathetic Parthirana has to go. He and his entire senior leadership team needs to be replaced and fresh management brought in focused on driving McCloud delivery over the line.
“I don’t think anyone on the committee, or watching the hearing, could be at all impressed or reassured that this is a senior leadership team on top of the issues – and with a clear and decisive plan to handle the problem going forward.
“What was missed was the fact that the SPPA had years to prepare, but there was no questioning of how the SPPA spent the 18 month legislative window they were given to deliver. The chief executive said he would have done things differently in March 2025 knowing what he knows now but March was supposed to be the end of the process, not the beginning.
“All in all, not a convincing performance by the SPPA team which would give anybody any confidence this is all going to be resolved in the immediate future.”
As of August, some 55,000 staff were still to get statements, which have to be delivered before any compensation can be kickstarted for lost money. That number has gone up to 110,000.
The agency has relied on a loophole in the Public Service Pensions and Judicial Offices Act 2022 that states that the date of the delivery of pension remedy statements may also be “such later day as the scheme manager considers reasonable in all the circumstances in the case of a particular member or a particular class of member”.
Scotland faces a bill running to £1.7bn to repair the damage which is adding extra financial burdens to the NHS in Scotland, the 32 Scottish local authorities, Police Scotland and the Scottish Fire and Rescue Service, who all rely on taxpayer cash to run.
The pensions scandal has hit Police Scotland. (Image: Newsquest)
All have now had to increase the amount they pay into their pension schemes for staff, known as employer contribution rates, to cover the extra costs caused by the court ruling.
An SPPA spokesman said Mr Pathirana “gave evidence in a frank and honest way and at no time did he evade MSPs or seek to mislead them”.
He added: “Since being appointed, he has secured increased agency funding to meet the challenge of Remedy, appointing new staff and new system capabilities to streamline the provision of statements accurately and on time.
“Mr Pathirana apologised to the committee for not delivering to the extent that he had wished, but the committee recognised that the SPPA is in a similar delivery position as other pension scheme administrators in the UK and thanked the SPPA for providing the update.”