UK - The Universities Superannuation Scheme faces a massive administration exercise to trace members who have been underpaid for the past 30 years.
The scheme has put forward plans to rectify the problem after the High Court ruled that members who took early retirement, or transferred-out and had a contractual retirement age of 60, wrongly had their pension actuarially reduced to the fund’s normal retirement age. This was age 65 until 1995 and 63 thereafter.
The problem goes back to 1974 and it is expected that each university in the scheme will need to check its records – USS has approximately 37,000 pensioners and 51,400 deferred members.
The problem was first highlighted by the Association of Universities Teachers.
Thompsons partner Ivan Walker, who represented the AUT in court, said USS’s rectification plan – which would determine who needed to be contacted – was still awaiting court approval.
He said that where pensioners had died before they could be contacted then their spouses or estates would have to be paid.
He described the task of contacting people as “horrendous” and estimated that the admin costs involved could be as much as the compensation.
Watson Wyatt head of administrative consulting Allan Course (pictured), who is unconnected with the USS, said such errors could occur if benefits were calculated in accordance with a “custom and practice” and without checks against scheme rules, amendments or agreements.
The USS said it was not prepared to comment until it heard back from the High Court on the rectification plan.
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