Errors in records could leave retirees pensions cut in half
Trustees Agenda posted on 3 July, 2018
A report in the Daily Telegraph states that thousands of retired public and private sector workers could potentially be facing a substantial reduction in their pensions following a record check by HMRC.
The HMRC check, which is due to be finished by the end of the year, found that a number of pensioners who were contracted-out of the state pension top-up between 1978 and 1997 are affected. As part of being contracted-out, these pensioners have been receiving a 'guaranteed minimum pension' from their pension schemes which does not tally with the HMRC records of what they should be receiving. This is due to poor record keeping and missing paperwork.
As a result of this, pension schemes will be required to rectify any previous miscalculations which could, according to the Telegraph, result in some pensioners' benefits being halved. Others are believed to have been paid up to £10,000 too little.