Teachers’ Pensions, which runs the Teachers’ Pension Scheme, has been criticised by its members over its perceived poor service delivery, as experts highlight the limitations of relying on online servicing.
At March 2016, the unfunded defined benefit scheme had 671,320 active members and 578,205 deferred members. It has employed Capita for administration services since 1997.
I have spent hours trying to get through over a period of weeks. This has to be the most appalling support possible. You are placed in queues of up to 50 people
Brendan Redko, teacher
Members have taken to social media to complain to the scheme over long telephone waiting times for customer support, an inability to access pension information online and incorrect charges.
'Struggling to pay bills'
Katie Ann Stoker, a teacher from Birmingham, tweeted Teachers’ Pensions in October with concerns that she had not successfully opted out of the scheme.
Stoker told Pensions Expert: “I opted out of the scheme when I first started teaching and was auto-enrolled after two years, which is incorrect as it is meant to be three years.”
Benefits underpayments to retired teachers
Up to 93,000 Teachers' Pension Scheme members who retired between April 2011 and April 2015 were underpaid their pension benefits, the Teachers' Pension Scheme revealed in its latest annual report.
The issue came to light in an investigation prompted by a separate member complaint against the administrator. "Wider investigations revealed that more members were affected," the report states.
The scheme said the problem arose because "when a member retires in any given financial year, the Scheme does not know the Pension Increase (PI) factors to be applied to fully index the lump sum and pension up to the date of retirement until they are published by HMT".
Every three years an employer must put certain staff back into a pension scheme. This is known as automatic re-enrolment.
Brendan Redko, who has taught for 37 years and is looking to retire, said that the scheme’s inability to process customer enquiries efficiently had made it impossible for him to proceed fully with an arranged financial review.
“I was unable to access projected figures relating to my pension and this made it impossible to compare projected pension against current part-time income and whether it was advisable to draw my full pension now or later,” Redko said.
“I have spent hours trying to get through over a period of weeks. This has to be the most appalling support possible. You are placed in queues of up to 50 people,” he added. The scheme is understood to have had a service outage in August. Members were told that it had experienced IT problems.
“I had to opt-out again in April of this year due to over £100 being taken off me. They carried on taking it off me until around June,” Stoker said.
“At this point they owed me over £300 and I was struggling to pay my bills. It then took them until September to refund my money. They disputed my paperwork and kept blaming my employer,” she added.
A third teacher, who did not wish to be named, told Pensions Expert that they attempted to review their pension for over a year.
The teacher said: “I was divorced and haven’t been able to check if the amount paid in for the settlement is correct. I was told it had gone into a separate pot, that was three years ago. Still don’t know.”
Another member took to Facebook to complain that their current benefit summary, along with their previous two displayed on the Teachers’ Pensions website, “now excludes the past added years I have been contributing”.
Data should be spot on
Dan Taylor, client director at third-party administrator Trafalgar House, said driving people online “does mean that you’re not insulated from any shocks or problems when they may arise with web services.”
“Any changes [or] updates to the site need to be thoroughly tested, there needs to be a continuous strategy of improvement and development on the site. You can’t really afford for any failure in terms of your digital offering if your core strategy is to drive members via that route,” he said.
David Davison, director at consultancy Spence & Partners, said that “the problem is if you’re moving to an online mechanism, the quality of the data has to be even more accurate, because you’re trying to avoid human contact and human interaction.”
The limitations of relying on online servicing are exposed by what Davison termed “non-standard” issues, such as an enquiry relating to divorce. These require human contact to resolve.
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Teachers’ Pensions could not be reached for comment.
A Capita Employee Benefits spokesperson said: “We are committed to delivering a high-quality customer service. There have been some instances where members haven’t received the experience both they and we expect, and we have put steps in place to resolve that.”
