Thousands of teachers could be missing out on up to £10,000 in backdated pension payments due to administrative errors, according to MoneySavingExpert. The Teachers' Pensions scheme, administered by Capita, has faced delays in processing payments and claims for deceased members, linked to a 2018 court ruling.
Background of the Pension Changes
Between 2014 and 2015, the UK government transferred most public sector workers, including teachers, from final salary pensions to career average pensions. Workers within 10 years of retirement remained on the old scheme, while younger staff moved to the new arrangement.
The McCloud Remedy
Those on the new scheme challenged the transition as unfair, and the High Court ruled in their favor in 2018. This led to the government transferring all workers to the career average scheme by March 2022. However, varying regulations applied between 2015 and 2022, prompting the introduction of the "McCloud remedy." This allows affected individuals to choose whether their pension entitlements for that seven-year period are calculated under the final salary or career average system.
The process begins with the pension provider sending a personalised "remediable service statement" (RSS) to eligible members, comparing benefits under both schemes. Depending on the member's choice, this could result in thousands or even tens of thousands of pounds in retrospective payments. In some cases, individuals may need to repay money if they opt for lower benefits than currently received.
Delays and Responses
The government initially set a deadline of early 2025 to distribute all statements, but this has been extended. A Department for Education spokesperson said: "We understand and recognise the disruption that delays have caused for some teachers - the Transitional Protection (McCloud) remedy is one of the most significant changes to public service pensions in recent years, and delivery is being phased to ensure accuracy and fairness."
A Capita spokesperson added: "Capita administers the Teachers' Pension Scheme on behalf of the Department for Education and in line with scheme regulations. The scheme has experienced a sustained increase in complexity and volumes in recent years, including as a result of regulatory changes, which has contributed to delays in some cases."
