Warwickshire County Council has written off more than £2m in pension overpayments made to retired staff members dating back an average of 18 years.
The decision was made by council leader Cllr Izzi Seccombe (Con, Stour and the Vale) this week after officers advised that it would not be cost effective in many of the cases to pursue the overpayments due to the volume of cases, the costs of legal action and the low value per claim.
Figures show there have been 1,180 cases totalling £2.2m. An additional £45,000 will be paid out to 122 pensioners where there has been an underpayment with the money coming from the Warwickshire Pension Fund.
A report prepared this week explained that the cases were highlighted due to a discrepancy between council figures and those held by HMRC.
It said: “Certain members have been identified as having been underpaid pension and others having been overpaid pension nationally and within the Warwickshire Local Government Pension Scheme (the Fund).
“With regard to underpayment cases, the Fund’s intention is to write to all pensioners and dependents who have suffered an underpayment setting out the correct pension they should now be in receipt of and confirming the historic underpayment. The Fund expects to correct the pension in payment and make payment of the historic payments owed as soon as practically possible. The average underpayment is £118 per year.
“With regard to overpayment cases, the pension in payment must be adjusted to the correct value going forward as the Fund cannot knowingly make incorrect payments to any scheme member. This will be done in consultation with each affected member and with no less than two months’ notice of any change.”
The report then listed reasons why the Fund would not seek to recover the overpayments.
It added: “Most people affected are likely to be elderly and vulnerable and already facing rising inflation and costs of living. These factors could impact the Fund’s ability to recover some or all of the overpayment and lead to additional unrecoverable costs in taking any recovery action.”