Public sector pension fund in meltdown after botched IT upgrade

PENSIONERS have been left unpaid for months on end after one of the country’s largest public sector retirement funds went into meltdown.

Members of the West Midlands Pension Fund (WMPF), who include former school, police and fire service workers, have been left unable to access their money following a computer system upgrade in July 2023.

Some have been forced to delay their retirements as a result.

Whistleblowers said the IT upgrade had been rushed, and that the new system did not have the capabilities of the older portal, meaning key procedures such as paying out to newly retired members had been affected.

Members said the delays were a “disgraceful shambles” and had meant that they were relying on family members to pay their bills.

Others said they have been diagnosed with clinical depression following months of waiting for the fund to pay out their pensions.

The pension fund, which has more than 350,000 members, is part of the Local Government Pension Scheme.

It typically processes 8,000 new retirees’ pensions every year, with members including the employees of more than 800 public sector organisations. However, the IT update has caused a major backlog. As of November 2023 there were 16,750 amalgamations, 7,615 deferments, 2,644 retirements and 704 deaths of members outstanding, the data show.

Before the pension fund introduced its new system, provided by the technology company EQ Retirement Solutions, the average number of retirements being processed daily was 33. After the system was introduced this dropped to less than 10 a day.

Some 2pc of active members of the scheme are waiting for pension payments to begin, a Freedom of Information request revealed earlier this month.

An insider at the scheme said the fund’s management had become “topheavy” owing to over-promotion in the public sector organisation, adding that there were not enough staff to do the work required to clear the backlogs.

One pensioner, a former school cook who retired in December, said she has yet to receive any communication from the pension fund. She added: “I haven’t bought Christmas presents for my seven grandchildren, thinking I was going to get my pension.

“They’ve ruined my retirement and they have ruined my Christmas.”

A 72-year-old school business manager, who retired in August 2023, said she had been forced to live off her state pension since she gave up work.

She said she had lost count of the number of calls she had made to the fund and is worried about where her money is.

She said: “The system is obviously not fit for purpose. And where is the money?”

Rachel Brothwood, executive director of the WMPF, and Duncan Watson, chief executive of EQ Retirement Solutions, apologised for the delays that members were experiencing and said that they had “redistributed resources” to gather documentation and expedite priority cases.

They said: “We are also working to provide provisional quotes for members automatically, which will enable members to self-serve and further reduce the number of outstanding cases. We are working hard to return to normal service standards as quickly as possible and the steps we are taking today will improve our processing capabilities in the medium term.”

The Pensions Regulator said it was aware of the issues facing the WMPF but declined to comment further.