“Mind blowing” errors in pensions

Are you using software on your laptop that dates back to the 1980s? It sounds unlikely, although some standard office applications do go back that far –  a pre-cursor to Word was first launched in 1983 but it has gone through massive development since then. Indeed everyone who uses it is aware of its frequent upgrades and patches.

However it seems the Government is still using software dating from the 1980s which has not been properly maintained and updated. The BBC reports that millions of people have been receiving an incorrect pension for years, because of the failure to update the Pension Strategy Computer System to take account of Graduated Retirement Benefit.

It seems the individual discrepancies may be quite small, with some pensioners being overpaid and others underpaid, but the accumulated impact could be large. And last year a different issue was found with the system which had resulted in substantial underpayments for 134,000 people.

But the truly worrying fact is that this error has been known about for at least 20 years. Apparently the DWP decided it would be too complicated to fix.

Steve Webb – the Lib Dem pensions guru and former Pensions Minister – says:

The scale of these errors is truly mind-blowing.

Although the absolute size of the errors is typically small, the number of people potentially affected is huge. More worrying is the total lack of transparency.

It beggars belief to hear that a government department could simply decide that it was acceptable to pay the wrong rate of pension for decades, but feel under no duty to tell Parliament or the public.

If the DWP has sat on this secret for decades, it makes you wonder how many other things simply get brushed under the carpet.

* Mary Reid is a contributing editor on Lib Dem Voice. She was a councillor in Kingston upon Thames, where she is still very active with the local party, and is the Hon President of Kingston Lib Dems.

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One Comment

  • >although some standard office applications do go back that far – a pre-cursor to Word was first launched in 1983 but it has gone through massive development since then.
    However, the modern version of Word is unable to read documents created using the 1980’s version of Word. This can create problems with long-lived electronic documents such as pensions, life insurance, etc.

    This maintenance of ‘old’ systems is quite common in the government and financial sectors, particularly where the system is administering a long-lived product – pension and endowment style investment. The need to maintain such systems was recognised back in the 1980’s by the CCTA and lead to the creation of ITIL. Obviously, with lassie-faire “let the markets decide” governments, such thinking got sidelined, hence why today government IT is suffering.

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