NHS workers are experiencing delays when claiming their pensions, owing to glitches after payroll administration was moved in-house from third-party administrator Equiniti.
On August 24, the Royal College of Nursing wrote on its website: “We have been told the software issues are due to be fixed this week but unfortunately delays to payments are likely to persist.”
It would appear that the timescale keeps changing. Any financial planning is impossible
Gordon Collins, NHS pensioner
It added: “NHS Pensions are advising that delays to first payments could be up to 60 days, but the RCN has been told that payments are being made approximately [three] weeks after the 30 day statutory target.”
RCN noted that the problems do not affect any pensions already in payment. The Pensions Regulator has been informed of the issues and a recovery plan is in place, according to the RCN.
A spokesperson for the NHS Business Services Authority, which provides some support services to the NHS, said: “There are a number of actions being taken, including working extra hours to increase the number of new awards being paid.”
The NHSBSA is “reviewing our processes to make sure they are as efficient as possible, introducing process changes, which have helped to increase productivity across the system, and recruiting and training additional staff to reduce the number of late cases”, the spokesperson added.
Split service led to risks
NHSBSA outsourced its payroll administration to Equiniti in January 2001. Payroll work returned in-house in July 2018.
The service body had conducted a ‘supplier bootcamp’ between October 7 and 9 2015, where it told prospective suppliers of a plan to publish a tender for services in April 2016.
A provisional strategy involved a split payroll and pensioner administration model.
In 2016, following concerns over the service impact of splitting administration between a third party and the NHSBSA, the latter cancelled a previous plan for the new tender.
Problems hinder member planning
Gordon Collins, a retired NHS nurse who still practises, expected his new pension to be paid on August 31. “It would appear that the timescale keeps changing. Any financial planning is impossible,” he said.
Collins has been in touch with the NHS, expressing fears that he will not be able to pay his rent or afford to renew his Nursing and Midwifery Council membership, which allows him to practise.
“When a member claims their pension, a manual calculation is always done by the awards team,” an NHS contact responded.
Collins noted: “They cannot tell you where you are in the queue... or give a timescale.”
The outcry among those affected has spilled onto social media. On Tuesday, Daniel Moldavsky tweeted to NHS Pensions: “My wife has not received her pension!! Are you going to pay or not???”
Jack Dromey, shadow pensions minister, said: “Labour will strengthen the Pensions Regulator to ensure greater oversight and review all outsourced contracts to make sure they provide value for money for the taxpayer, as well as protecting workers.”
It held concerns over “disaggregating pensioner payroll and pensioner administration” and “aggregating pensioner administration with the NHSBSA’s existing active/deferred member administration, in the required timescale”.
It also “identified complexity of such a level that the previously envisaged split could result in a disjointed model, damaging the customer experience and posing a material threat to continued service delivery”.
The NHSBSA instead elected to bring payroll administration in-house after Equiniti’s contract expired on July 22 2017.
Equiniti is in daily contact with NHS Pensions over its software issues, a spokesperson said.
They said the problems do not originate from Equiniti’s time as administrator, or its Compendia software, which is still being used by NHS Pensions.
A spokesperson for the regulator said: “We are working closely with the scheme manager to ensure members receive the benefits they are entitled to.”
John Newman, pensions director at consultancy Broadstone, observed that while most outgoing administrators are co-operative, an outgoing scheme will not be their top priority.
“If you have a tight transition timescale, and to avoid missing pension payments, it is not uncommon to arrange with the incumbent to continue the payroll function for a month or two should any problems be encountered,” he added.
