Scottish Public Pensions Agency (SPPA) chief executive Stephen Pathirana is being summoned to face Holyrood’s finance committee after repeated delays in providing compensation remedies for hundreds of thousands of affected workers.
It comes after The Herald revealed how the Pensions Ombudsman was examining multiple complaints about how the Scottish Government agency has turned the task of compensating staff into what one campaign leader called “a shambles” with some dying waiting for their pension details.
A pensioners group threatened First Minister John Swinney with the action if heads do not roll within the leadership team of the SPPA over failures in providing remedies to the workers which include Scots police, teachers, NHS staff including nurses, firefighters and local government workers which is expected to drag on until 2027.
In Scotland the SPPA had 18 months according to legislation to give pension remedy statements with a statutory deadline of March 31 this year.
But it missed that and at least one other, locking retired people out of their entitlement and costing taxpayers millions more in interest — charged at 8% a year. By the first statutory deadline of March 31, it had processed only a third of those affected, with police pensioners alone receiving around £4 million in interest payments.
They have been affected by a High Court ruling in 2018, which found the UK government’s 2015 public sector pension reforms unlawfully discriminated against younger workers.
Pensioners are waiting in some cases for tens of thousands of pounds by way of compensation over the discrimination with an admission that the latest October 31 deadline to deal with the issues will be breached and that it is expected to drag on to 2027.
Of the over 300,000 said to be affected, over two thirds are overseen by the SPPA which is responsible for providing each worker, both existing pensioners and those preparing for retirement with a potential financial remedy.
It has now emerged that the SPPA chief executive has been called to appear before MSPs at the Scottish Parliament’s finance committee to be quizzed about why the problems have not been resolved as the agency comes under new scrutiny.
Kenneth Gibson, convener of the committee has told the pensions chief that there was “disappointment” over the continued delays and that responses from the agency had made it “difficult to establish exactly what progress has been made to date and what progress is anticipated by when”.
The committee has told the SPPA chief executive, who has come under increasing pressure over the crisis, that they want regular updates on progress towards completion.
Retired police superintendent Martin Gallagher, who heads a Job’s Forgotten group of over 500 members to co-ordinate issues for those who are fighting to get their pension remedies, said: “It is heartening to see that our Parliament is finally taking action to hold the SPPA to account for its abysmal failure to deliver retirements to public servants that they worked decades for to enjoy.
“It appears the delaying tactics the SPPA employ in relation to the remedy may finally be running out of road and a light is going to be shone on the years of missed deadlines, which have cost Scottish taxpayers millions of pounds.
Police Scotland is among the authorities hit by the pensions scandal. (Image: Lawrey Anstis)
“I, for one, will be watching with great interest.”
One teacher, who is fighting for nearly £30,000 that he says he is owed, who believes the SPPA chief had to be fired for presiding over the delivery, said: “Why was Mr Pathirana putting out statements to pension scheme members and to MSPs of earlier resolution dates which have now been shown to be grossly misleading projections? Surely the organisation must have known these could not be met.”
The crisis stems from a High Court judgment in 2018, which found the UK government’s 2015 public sector pension reforms had unlawfully discriminated against younger workers. The reforms aimed to cut costs by moving most staff onto less generous schemes, while letting older employees stay on better ones.
Judges and firefighters successfully challenged this in what is known as the McCloud ruling, forcing all public sector schemes — including those in Scotland — to compensate affected members.
Years later, delays and confusion mean thousands of Scottish pensioners are still waiting for remedy statements detailing money they are owed from the debacle, with frustration mounting on all sides.
The SPPA estimates it will cost the Scottish public sector including the NHS, councils, Police Scotland and the Scottish Fire and Rescue Service an estimated £1.7bn extra to cover the cost of remedying the discrimination.
If asked to give evidence at a Scottish Parliament committee attendance is expected in good faith.
But if that proves difficult, people can also be formally required to attend under Section 23 of the Scotland Act 1998 if it concerns a matter for which the Scottish Government has general responsibility.
Mr Pathirana has told the committee that the remedy “remains the agency’s top priority” and insisted “we are making good progress”.
He insisted that the Pensions Regulator, which is tasked with protecting people’s benefits and is overseen by the UK Government “recognises the scale of the administrative challenges…”.
He added: “We are working hard to deliver this programme of work and have made substantial improvements to working efficiencies along the journey.”
An SPPA spokesman said: “The SPPA and other public pension administrators across the UK are working hard to meet the challenges of delivering the McCloud Remedy – required to fix discrimination caused by the UK Government’s pensions legislation.
“The SPPA welcomes this further opportunity to update on our work on Remedy, alongside continuing to safely and securely administer pensions to Scottish teachers, police, firefighters, and NHS employees.”
