Civil Service Pension Scheme compensation for delays and other administration problems

Tens of thousands of members of the Civil Service Pension Scheme have been affected by a wide range of problems caused by the unacceptable performance of scheme administrators.

These vary from the extremely serious (significant delays in the payment of pension) to the less impactful (inability to access an Annual Benefit Statement for a period).

Members affected by these issues must be given appropriate redress: they should be put back in the position they would have been if the maladministration had not happened.

This means that financial losses (eg charges or interest on loans taken out) must be made good.

There should also be compensation for non-financial losses such as the distress and inconvenience caused to members.

The Pensions Ombudsman is the most appropriate ultimate forum for complaints

Redress can be obtained through the court system in each of the legal jurisdictions in the UK.

However, the Pensions Ombudsman was specifically established to provide a specialist, accessible and independent alternative to the courts in the case of pension disputes.

The Pensions Ombudsman is the preferred route for the vast majority of pension disputes because its decisions are legally binding and there are no fees.

However, the Pensions Ombudsman requires members to have completed a formal complaint process with the scheme first (eg see this update).

The aim is for most complaints to be dealt with by the Civil Service Pension Scheme itself

It is not feasible for the Pensions Ombudsman to deal with tens of thousands of complaints of serious maladministration by just one scheme, his office is not resourced for this.

The Civil Service Pension Scheme has a statutory, two stage complaint resolution process called the Internal Dispute Resolution (IDR) procedure.

If the process for compensating members affected by these problems is to work effectively, then most complaints will have to be resolved by the scheme’s IDR procedure.

The Pension Regulator’s code of practice states that a first stage decision should be reached within 4 months and a second stage decision within a further 4 months.

Prospect has written to the Cabinet Office and the Chairs of the relevant select committees about our concerns that there are not enough resources to manage the scale of complaints.

Prospect has also corresponded with the Pensions Ombudsman about the appropriate level of compensation that should be awarded (particularly for non-financial losses).

Our main concern is that the extreme nature and unprecedented scale of the maladministration in this case might not be fully recognised by this process.

The Pensions Ombudsman has proposed that different categories of lead cases be assessed to ensure that the IDR procedure delivers appropriate compensation.

Prospect and the other trade unions will work with the Cabinet Office and the Pensions Ombudsman on the identification and representation of lead cases.

We will ensure that the strongest arguments are made for the appropriate level of compensation for lead cases and any other cases involving or affecting Prospect members.

Submitting a claim to the IDR procedure is quite simple

The scheme’s website contains a lot of background information about the IDR procedure that it is useful to read before submitting a complaint:

Internal Dispute Resolution (IDR)

You do not have to use the scheme’s application form for making a Stage 1 complaint, but it is usually simplest to do so:

Civil Service Pension Scheme – Internal Dispute Resolution – Stage 1 Application Form

There are some important points that should be borne in mind when submitting a claim

The following information may be useful in helping you decide what to claim for and when:

• The IDR procedure is about claiming compensation for financial and non-financial losses incurred. It is not about escalating a case to resolve it sooner.
• Consequently, it is usually most appropriate to submit an IDR claim after the underlying issue has finally been resolved and the full extent is known.
• The Pensions Ombudsman will only investigate if you bring him a complaint up to 3 years after you became aware (or reasonably ought to have been aware) of an issue.
• It is not clear when the Pensions Ombudsman might determine when members ought to have been aware of these problems.
• It might be prudent to work on the basis that the Pensions Ombudsman could use 1 December 2025, when Capita took on this contract, as the relevant date.
• The Pensions Ombudsman has the discretion to waive time spent engaging with the IDR procedure against the 3-year limit, but it would be prudent not to rely on this.
• All financial losses (ie out-of-pocket expenses) caused by the maladministration should be claimed for (keep good records of these as evidence).
• Non-financial losses (eg the distress and inconvenience caused by the maladministration) should also be claimed for.
• The Pensions Ombudsman has guidance on the range of compensation applicable in respect of non-financial losses.