Principal Civil Service Pension Scheme · CAS-32800-Q4G0

CAS-32800-Q4G0

Ombudsman’s Determination Applicant Mr H

Scheme Principal Civil Service Pension Scheme (PCSPS)

Respondents MyCSP

Cabinet Office

Outcome

Complaint summary Mr H has complained about the incorrect pension statements he received from MyCSP, the administrator for the PCSPS. As a result, he has lost trust in the administration of his pension and would like an external audit of his pension record to ensure he has the correct benefits.

Background information, including submissions from the parties

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Adjudicator’s Opinion

• MyCSP received the data file from the Employer and calculated the ABS based on this. Both the Employer and MyCSP have sent evidence of its information files. The Added Pension and pensionable earnings on both files were the same. Once Mr H highlighted the errors, MyCSP contacted the Employer for the correct figures and MyCSP amended Mr H’s ABS accordingly. MyCSP cannot held responsible for producing an incorrect ABS as it was based on information sent by the Employer.

• However, when MyCSP issued the incorrect PSS, it did hold the correct data from the Employer. This amounts to maladministration. Mr H claims were hypothetical that, had he submitted the incorrect annual allowance figures from the PSS onto HMRC’s online calculator, he would have been investigated for money laundering. There was no financial or other impact caused by the error.

• Although MyCSP sent Mr H incorrect pensions statements, Mr H did not make any financial decisions based on the statement. So, he has not suffered financial detriment.

• Mr H received three incorrect pension statements between 2016 and 2018. Further, Mr H had to wait nine months for a response to the IDRP. Taking this into account, the Adjudicator considered that Mr H had suffered significant distress and inconvenience and an award of £500 would be appropriate to reflect this. As 4 CAS-32800-Q4G0 the Cabinet Office has offered a total award of £750 this was sufficient in the circumstances.

• The Cabinet Office has confirmed that Mr H’s pension record is correct, however, the Adjudicator understood why Mr H may believe otherwise. The Cabinet Office has provided reassurances that it has undertaken an independent and thorough investigation into Mr H’s pension records and pension documentation. It is satisfied that Mr H’s pension record is correct. There is no reason why Mr H’s record would not be correct as the investigation would have highlighted any errors and Mr H has not provided any evidence to support a different view.

• The Cabinet Office provided a breakdown of the Scheme PIA calculations for Mr H, which are set out in the Appendix. The PIA is the growth in pension savings during a pension input period (PIP). To calculate this, MyCSP needs to calculate the growth in benefits from year to year. It will subtract the opening balance from the start of the PIP from the closing value of the PIP. The opening value is the amount of pension built up during the previous PIP. This amount is multiplied by 16 (a calculation set by HMRC) and adjusted to account for inflation. This is then compared with the value of benefits built up during the current PIP, also multiplied by 16. The difference between these two figures is the PIA.

• Based on the calculation performed by MyCSP, as set out in the Appendix, the Adjudicator was satisfied that the correct procedure was followed..

Cabinet Office and MyCSP accepted the Adjudicator’s Opinion.

Mr H did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider. Mr H provided his further comments which do not change the outcome. I agree with the Adjudicator’s Opinion and note the additional points raised by Mr H.

This is evidenced by the Employer paying for independent sessions with a pension expert. The pension expert discovered mathematical anomalies.

As a result, he wants a thorough independent review of his pension.

5 CAS-32800-Q4G0 Ombudsman’s decision

Anthony Arter

Pensions Ombudsman 11 March 2021

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Alpha PIA calculation breakdown:

2015/2016

Opening Value: £0.00

Pension @ 01/04/2016: £2,519.61

Closing Value: £2,519.61 x 16 = £40,313.76

Pension Input Amount: £40,313.76 - £0.00 = £40,313.76

Post alignment: 267/365 x £40,313/76 = £29,409.22

Pre alignment: £40,313.76 - £29,409.22 = £10,904.54

2016/2017

Opening Value: £40,313.76

Inflation: 0%

Pension @ 05/04/2017: £5,328.47

Closing Value: £5,328.47 x 16 = £85,255.52

Pension Input Amount: £85,255.52 - £40,313.76 = £44,941.76

2017/2018

Opening Value: £85,255.52

Inflation: 1%

Revalued Opening Value: £85,255.52 x 1.01 = £86,108.08

Pension @ 05/04/2018: £8,501.10

Closing Value: £8,501.10 x 16 = £136,017.60

Pension Input Amount: £136,017.60 - £86,108.08 = £49,909.52

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Opening Value: £136,017.60

Inflation: 3%

Revalued Opening Value: £136,017.60 x 1.03 = £140,098.13

Pension @ 05/04/2019: £11,952.33

Closing Value: £11,952.33 x 16 = £191,237.28

Pension Input Amount: £191,237.28 - £140,098.13 = £51,139.15

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