It has emerged that of more than 200,000 staff the SPPA is responsible for, nearly two in three have not retired yet and sources say the majority of people they are contacting would not even be directly affected as they are on their best pension.
The SPPA admitted that while remedies were meant to be completed by the end of March, last year, then pushed back to July then the end of October it will not be complete till 2027 with only half of the over 200,000 affected actually contacted as of December.
The Pensions Ombudsman is already examining multiple complaints about how the Scottish Government pensions agency has turned the task of compensating retirees affected with some dying waiting for pension details.
Mr Pathirana is now facing a fresh probe by MSPs who are concerned over the handling of the affair, despite the SSPA chief presenting his plan to put things right to a Holyrood oversight committee last month.
Dr Stephen Pathirana, chief executive of the Scottish Public Pensions Agency has appeared before he Scottish Parliament’s finance committee (Image: Scottish Parliament)
A letter sent to the SPPA executive by the parliamentary finance and public administration committee states they “remain to be convinced that these matters are being treated with the sense of urgency that the matter deserves”.
Pensioner campaigners had been left less than impressed by Mr Pathirana’s “unconvincing” explanations, regret nor his plan to put things right as presented to MSPs in the Scottish Parliament.
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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.
Martin Gallagher, who leads the Jobs Forgotten group of over 500 pensioners fighting for their retirement right,s welcomed the move raised concerns that “meaningless” letters had gone to thousands who were unaffected saying that the activity provided a “smoke screen of performance.”
He compared it to an episode of the BBC farce Yes Minister called The Compassionate Society, seen as a classic satire of target-driven bureaucracy in which a minister finds that an award-winning NHS hospital was one of the best run in the country. But the catch was that it achieved this by never admitting a single patient.
“While this was satire, I can assure you it has found modern day reality in the shape of the SPPA,” said Mr Gallagher, who said the unaffected thousands should be the last to be contacted.
‘A Yes Minister farce’: ScotGov pensions body under new scrutiny over ‘meaningless’ letters (Image: BBC)
Mr Pathirana previously expressed regret when he appeared before MSPs saying that 85% of police cases but that firefighters are not expected to start getting remedy statements till the end of this year.
But now he is facing further scrutiny by the committee, who want him back before them in March.
They are also quizzing public finance minister Ivan McKee about the progress of the delivery and on any support given by ministers.
In a letter to Mr Pathirana, committee convenor Kenneth Gibson said they were also “uncertain” whether the SPPA were prioritising retirees and those at the end of their working lives, or instead “focusing on increasing the overall numbers of cases addressed”.
He said that the MSPs seek “evidence that the SPPA has a clear structure in place to prioritise the cases of those most in need, particularly those in or near retirement. We also ask for justification for the approach taken.”
He also said they wanted “reassurances” that those affected can have confidence in the new timetable for delivery given the repeated delays.
They also want a projection of when the SPPA expects to return to ‘business as usual’ and on how it performed in the five years leading up to dealing with the remedies.
Mr Gallagher welcomed the move by the committee saying: “It looks like the SPPA are finally being held to some form of account.”
The group has already said that the SPPA chief should lose his job over his response.
As of December, some 110,000 staff were still to get statements over what has been called the McCloud remedy, which have to be delivered before any compensation can be kickstarted for lost money.
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.
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.
Employer contribution rates are the percentage of an employee’s salary that an organisation must pay into the pension scheme on top of the worker’s own contributions. Higher rates mean that employers – and ultimately taxpayers – have to put in more money.
A Scottish Government spokesman said: “The Minister for Public Finance is fully aware of SPPA’s programme of work, of which the McCloud remedy is the top priority. He has been clear that he wants these matters to be resolved as quickly as is practicable. This situation is not unique to Scotland, it is affecting public sector pension providers across the UK.
“The McCloud remedy means SPPA continues to undertake significant additional work to ensure the 215,000 eligible members can make a choice between two benefit values, either now or at retirement. The Scottish Government has increased the budget allocated to the SPPA year on year to support the delivery of the remedy, including approving SPPA’s budget requests for this year.”
The SPPA was approached for comment.