More than 30,000 retired teachers face cuts to their pension payments after a Whitehall blunder led to recipients being overpaid for decades.
In December 2009, Cabinet Office minister Liam Byrne revealed that more than 95,000 members of pension schemes covering the NHS, teachers, armed forces, judiciary and civil service had been overpaid for up to 30 years. He said the payments would have to be changed to reflect the correct rate in what would feel like a cut to staff.
This week Teachers Pension Scheme wrote to pensioners affected saying it had no choice but to reduce the pensions, although it did not reveal how much it planned to reduce payments by.
In its letter, the agency said only that new “corrected” payments would begin in August. It blamed the “complex” calculations involved for not providing pensioners with details about the cuts yet.
“We have no discretion to pay a pension different to that which the scheme rules allow,” the letter read. “Where we are aware that we are paying the incorrect rate of pension, we have a duty to adjust the pension to the correct level.”
Byrne said the value of the overpayments was more than £126m, but the government was advised that it was “unlikely to be cost-effective” to attempt to recover past overpayments from pensioners.