Councillors have called for an independent inquiry to determine how 14 members of the Teachers’ Pension Agency found they were missing seven years’ pension contributions from their employer.
As first reported by the BBC, Anglesey County Council was notified by a concerned teacher that contributions worth “tens of thousands of pounds” were “missing”. It subsequently emerged that Anglesey council had not been making contributions for at least 14 teachers for seven years.
Ripples from mistakes like this erode confidence in an industry that’s already pretty poorly regarded. How many other teachers are now worrying if they’ve missed out too?
Vincent Franklin, Quietroom
There are fears the problem could be more widespread, with Anglesey council asking teachers to check their pension valuations to discover whether they are also affected. The missing contributions for the 14 known cases could already be worth hundreds of thousands of pounds.
According to the BBC’s report, Anglesey council said it was aware of errors in a “small number of teachers’ service records” and apologised, and a spokesperson said no one would lose out financially and that “contributions have now been paid”.
However, councillor Bryan Owen called for an independent inquiry to determine the origin and the extent of the mistakes.
Cases emerge ‘more often than you think’
Eversheds Sutherland partner Gary Delderfield told Pensions Expert that cases such as these emerge “more often than you think”.
There have been “numerous cases where this has happened where, for whatever reason, somebody somewhere realises a mistake has been made,” he said.
“Sometimes it can be the employee contacting the Teachers’ Pension Scheme to check their benefits and then it’s realised they’ve got no accrual in the scheme. And then TPS will look into it and go back to the employer. So it’s not uncommon that employers get faced with fairly substantial arrears bills from TPS.”
Delderfield added that there is a default interest rate on any late contributions — the Superannuation Contributions Adjusted for Past Experience discount rate, currently 2.4 per cent plus the consumer price index.
“It’s a fairly chunky interest rate on top of the arrears. Employer contribution rates are around 23.5 per cent at the minute, so you rack up those unpaid contributions for a few years plus interest. You can be looking at some fairly substantial arrears claims,” he said.
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Vincent Franklin, co-founder of Quietroom, told Pensions Expert: “This is a sad reflection on our industry’s failure to get people interested. It shouldn’t be seven years before one of these teachers realises that they’ve not been paid the contributions they’ve earned. How dull or impenetrable were those benefit statements?
“Telling people that they should be ‘reassured’ and that they ‘won’t lose out’ isn’t enough. We have to make sure people understand why they can be reassured and how we’re going to make sure they don’t lose out,” he said.
“Ripples from mistakes like this erode confidence in an industry that’s already pretty poorly regarded. How many other teachers are now worrying if they’ve missed out too?”
