The National Audit Office has published its report into government failures to provide appropriately valued lump sums for some 34,000 police and firefighters - leaving some members waiting 15 years for their full entitlement.
The NAO's report - published today - details the findings of its investigation into the compensation paid by government to those that retired from the Police and Firefighters' Pension Schemes between 2001 and 2006 without receiving their full pension entitlement.
This compensation was only paid after The Pensions Ombudsman upheld the pensioners' complaints in 2015.
The NAO said it carried out this investigation due to the significant amount of money involved and the length of time it has taken to resolve - finding the government had failed to understand its obligations for the oversight of key factors that translated annual pension payments to lump sums.
Indeed, the watchdog said the government was aware in 2006 that the commutation factors used to calculate police and firefighters' pension lump sums did not reflect the life expectancy of pensioners or the underlying trends across pension schemes - but said the government decided to test its liability through the courts.
Responding to the report chairwoman of the Committee of Public Accounts and MP Meg Hillier said: "The government's failure to update its pension calculation data resulted in an underpayment of pensions for 34,000 police and fire service personnel between 2001 and 2006, totalling £711m.
"While these underpayments in themselves are concerning, what is even more alarming is that these retired personnel have had to wait up to 15 years to get their full pay outs when the problems were picked up early on."
In a statement the Government Actuary Martin Clarke said: "GAD welcomes the report of the NAO into the past underpayment of retirement benefits for members who retired from the Police and Firefighters' Pension Schemes between 2001 and 2006.
"We are grateful to the NAO for its diligence and care in investigating this complex issue. We believe that its report clearly sets out how the underpayments occurred and the legal and administrative process through which they were resolved.
"As the report acknowledges, the affected members have been fully compensated by government, and GAD has taken extensive steps to remove the risk of any future delays in supplying updated pension scheme factors and other information in accordance with its statutory duties."
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