Lack of resources means that majority of pensions are not being re-assessed – NAO

A lack of resources within the Ministry for Family, Children’s Rights and Social Solidarity means that the majority of pension re-assessments are not being carried out as required, a report penned by the National Audit Office found.

As per the social security act, re-assessments on retirement pensions are to be held every year; however the NAO found that the department responsible “does not have the necessary resources to enable it to conduct such re-assessments at this frequency”.

The NAO noted that “only an aggregate of 26,679 individuals eligible for a RP, were subject to re-assessment between 2015 and 2017. This average of 8,893 per year is just around 18% of the total eligible RP pensioners.”

The report said that in view of the large number of pending pensions to be reviewed and considering that the said arrears would still be due to the pensioner’s heir/s should the said pensioner pass away, the amounts owed may be substantial.

So far, these amounts have not been quantified and not accounted for as accrued expenses, the NAO said.

“All pensions are reassessed annually and increased by the annual cost of living awarded in each budget.

The NAO also noted that given the limited resources to meet the demand for re-assessment, there is still no policy in place to ensure that re-assessments at least cover all the pensions over a period of time.

Acknowledging the resource and work-flow situation, the NAO said that it was “extremely difficult” for this yearly re-assessment to be conducted, and recommended that “in the short term, a re-assessment policy with applicable procedures could be issued to ensure that the Department’s resources are deployed in a manner that ensures that such reassessments would cover all pensions over a specified period of time, say every five years.”

On their part, the Ministry pointed out within the report that “all pensions are re-assessed annually and increased by the annual cost of living awarded in each budget”, but noted that the problems found by the NAO were pertaining to “the collective agreements which due to lack of resources are not up to date”.

The Ministry said that for their limited resources “it is not advisable to be deployed as suggested, as this would mean to shift priority from assessing new claims to re-assessments.”

Having said this, the Ministry noted that given the current handling of the situation, all cases would be re-assessed “within the suggested five year time frame as suggested in the recommendation”.

More positively, the NAO were satisfied that the procedures and controls in relation to the initial pension calculation, as well as subsequent rate re-calculations were in place and in sound operation. They were also satisfied that the system in place for pensions to be triggered and for obtaining the necessary figures for initial figures had limited manual intervention and was as a result less prone to mistakes due to human error and more efficient.