Written evidence from Kenneth Thompson (HOS 11)
Public Administration and Constitutional Affairs Committee Parliamentary and Health Service Ombudsman Scrutiny 2018-19 inquiry
I am making this submission as a member of the public who helped two friends take their cases to the Parliamentary Ombudsman. Their complaints were against the Department of Work and Pensions (DWP) because the DWP did not tell anyone (including Parliament) and have still not told up to about 11 million people who were contracted out of state second pension about loss of cost ofliving increases on part of their occupational pension known as Guaranteed Minimum Pension (GMP) which used to be paid with their state pension.
Parliamentary Ombudsman is unfit for purpose and does not tell the truth and favours in this case the DWP as PHSO is unwilling to investigate why it has happened.
They are definitely not impartial as they believe everything mentioned to them by DWP but not my friends even though evidence given by my friends was coming from DWP and other Government organisations.
As my friends cases took over 5 years to complete I would suggest you ask the PHSO how many cases have taken say over 2 years and what is the longest time to complete a report in year ending December 2019.
My friends wanted them to put in the report that the DWP had deliberately not wanted to mention loss of GMP indexation and that they thought the law might not have been changed, but the PHSO refused to do it.
This complaint is unusual because even though the case was won and the PHSO said the DWP were guilty of maladministration we think there is a massive cover up going on with the approval of the PHSO because there are about 11 million people involved and cost of rectifying it could be over 15 billion pounds.
If the law had been changed then there would not be any cost to put it right but because the law might not have been changed then there could be a substantial cost running into many billions of pounds to correct it.
When their case started out it was just about not being told about loss of GMP indexation. We now think the law was never changed so the DWP have ceased paying GMP indexation illegally as the law was never changed.
It has now turned out to be a deliberate cover up by the DWP with the collusion of the PHSO.
This has all been done deliberately by stealth. The reason I came to this conclusion, was that it was never mentioned in Green and White Papers and MP's information packs to help them with pre legislation scrutiny and debates in Parliament. Also I can't find it mentioned in legislation.
As it became law in May 2014 they have had almost 6 years to tell people about the change in law (if the law was changed) that took away GMP indexation. I think because the law has not been changed that is why they can't and don't want to tell people about loss of GMP indexation.
What makes it even worse is that the PHSO have not been willing to ask searching questions and just believe everything they are told by the DWP.
In fact I think some of the replies are compiled by the DWP as the PHSO does not have technical knowledge to understand the complaint and what they are being told is a lie by the DWP.
I think the PHSO now knows that the change in law was never debated in Parliament and the law not changed so have knowingly been dragged into the DWP cover-up and are willing to be involved in the cover-up.
Their cases were first taken to PHSO in September 2014 and a final report done on 30 September 2019 which said the DWP were guilty of maladministration. Is five years a record?
It should have taken less than a year as it is very much like the cased of inherited SERPS where it took the PHSO less than a year to compile the report.
Their cases have involved four different case workers. The second case worker on 24 February 2016 stated that PO had decided not to uphold the complaints.
They asked the case worker to send information that she had found or received from the DWP that she had based her decision on not to uphold the complaints. All they received from her was a piece of paper from the DWP that contained a link to its website containing basic information on the NSP that did not mention loss of GMP indexation.
In December 2016 a case worker sent a further draft report, and the provisional decision remained as not upheld.
On 19 December 2016 caseworker announced that she was leaving the organisation, and her last day in the office would be 20 Dec 2016 and that the cases would reallocated within 4 to 6 weeks.
Correspondence was then with another case worker as a temporary holding person to contact.
They were then contacted by a more senior case worker in March 2017, who confirmed that she worked for the Complex Investigation Directorate and that after she had read through the papers it was clear to her that the matters raised were 'complex'.
My friends could not understand why it had taken the PHSO so long to realise their case was complex. Possibly they thought if they could drag it out, my friends would give up.
On top of this it has taken a further two and a half years for a new, more senior investigator to produce the final report on 30 September 2019, which was full of errors which they had pointed out to her and she had refused to change or remove. For instance, the report stated that they gained by contracting out when they had not.
The senior case worker told my friends that the PHSO did not ask outside experts to help understand the problem.
Because of this I can only assume that she believed everything she was told by the DWP because she was not a specialist in the state pension system so could not challenge anything she was told.
The final report also referenced the DWP as continually stating that they were better off because of the triple lock which we told them was only on basic state pension and not state second pension (SERPS) and GMPs, which they accepted from DWP despite our continued denials, and so accepted what you were told by the DWP regarding the triple lock even though they had repeatedly told them that we were not! My friends challenged at every juncture why the DWP used the triple lock as any argument to justify cessation of GMP indexation, as it's an irrelevance
to their case (and which is obviously a deliberate diversion by the DWP to try to fob off complainants and PHSO. Instead of investigating the DWP further, the Ombudsman was content to apply a light touch, calling the DWP's reasoning as 'flawed' thinking.
Even though the DWP were found guilty of maladministration my friends were not happy with the way their cases were dealt with as much of their own evidence which came from DWP or other Government Departments was deliberately ignored by the PHSO in producing their report.
The report mentioned the following
65. ln order to remedy the injustice we have identified that resulted from the DWP's maladministration, we recommend that the DWP should:
(They were given three months to reply, which was then extended to 5 months due to the election.)
Within three months of this report, review and report back on to us on the learning from this investigation, including action being taken to ensure that affected individuals receive appropriate communication from the DWP about their state pensions. ln particular, the DWP should ensure that their literature clearly and appropriately references that some
individuals, who have large GMPs and reach State Pension Age in the early
years of the new State Pension, may be negatively notice it mentions negatively rather than mentioning loss of GMP indexation affected by the
changes. The DWP should advise individuals to check their circumstances, and should provide instructions for how to do this;
d) Within three months of this report, review and report back about how other individuals who believe they have suffered an injustice as a result of the maladministration we have found can raise any concerns with the DWP and have them considered; and
e) Consider, and report back to us, whether this report and their response to our recommendations should be communicated to other interested parties such as the Chair of the Work and Pensions Select Committee.
30 September 2019
The PHSO refused to mention in the paragraphs above that they were worse off because ofloss of GMP indexation and used the term negatively affected which would not mean anything to most people. Their complaint was only about loss of GMP indexation without being told about it and nothing else and not if they gained or lost under other changes under the NSP but the PHSO kept on insisting and mentioning that people could gain from other changes but none of the changes that made people worse off so making excuses for the DWP not mentioning loss of GMP indexation in plain English.
We were surprised that the PHSO had not issued a copy of the report to the Chair of the Work and Pensions Select Committee especially as it affected 11 million people with losses up to about £20,000 neither of which was mentioned in the report.
As far as we are aware the PHSO has not sent a copy of their report to any other Government Department or Committee such as the Public Accounts Committee and the National Audit Office.
The DWP replied on the 28 February 2020 but what was said and sent by the DWP to PHSO has not been shown to my two friends to comment on to make sure that it was put in plain English that anyone could understand.
As you can see the DWP have been allowed to drag out their reply which has yet to be agreed by the PHSO.
We are now five and a half years on from when my friends first sent their case to PHSO because the DWP has not told people about the loss of GMP indexation.
The DWP knew about the problem from at least as early as January 2012 as they wrote to the Treasury about it and the affect it had on people in public service schemes. No mention of the effect on people in the private sector.
A Green Paper was issue in early 2011 and White Paper in about March 2013 neither of which mentioned possible change in legislation that would take away indexation on a person's GMP normally paid with the State pension.
The PHSO refused to ask the DWP why it was not mentioned in the Green and White Papers and any information packs given to members of Parliament to help in scrutiny and debates in Parliament about the NSP.
The reason they said they could not look at it was that they said they could not look at information about change in the law before it became law in May 2014.
We knew the PHSO was not telling us the truth (A Lie) as we sent them information from a report they did on what went wrong with inheritance of SERPS where they mentioned they did look at information before it became law.
https://webarchive.nationalarchives.gov.uk/20100406130519/http://www.ombudsman.org.uk
/improving_services/special_reports/pca/serps00/report.html#background
with effect from 6 April 2000 in respect of deaths occurring on or after that date.
Investigation
8. During my investigation members of my staff have scrutinised numerous DSS files and papers on the development and the subsequent implementation of policy on SERPS (although some files which might also have been relevant had been routinely destroyed in the course of time). Jointly with NAG staff, my staff have also interviewed DSS officials who were involved in the implementation of the provisions in the 1986 Act. The conclusions which I reach at the end of this report are based on what has emerged from that programme of work.
The PHSO deliberately ignored what they did and said in their report about inherited SERPS.
So the ombudsman is prepared to lie to my friends by saying they can't look at anything before it became law
We can only think that the PHSO did this was due to pressure from the DWP because of the number of people involved c 11 million and possible cost many billions of pounds.
The worst thing about all this is that special arrangements were made by the Treasury in March 2016 for people in the public sector to have their GMP indexation previously paid via the state pension to be paid by their occupational pension if they reached state pension age on and after 6 April 2016 and before 6 April 2021.
A decision has yet to be reached for people in public sector if they reach state pension age on and after 6 April 2021.
This was mentioned to the PHSO several times but deliberately ignored in their report as they did not want people to know that public service employees were getting special treatment regarding GMP indexation.
When I and one of my friends started writing to the DWP in about March 2013 just after the White Paper was issued asking questions about GMP indexation the DWP told us they did not pay increases on part or all of a person's GMP. The two of us knew this was not correct (A lie)as our own pension scheme booklets and Government web sites mentioned GMP indexation paid via the state pension.
It was only from then that the DWP denied they paid GMP indexation. We can only assume this was because they had deliberately not mentioned it in legislation or information packs given to Parliament. We also wrote to Steve Webb via our MPs and he also confirmed DWP did not pay GMP indexation.
As his replies were compiled by officials in the DWP we can only assume they were happy for the pensions Minister to lie in replies to the public.
A question was also asked in Parliament in January 2014 about GMP indexation and Steve Webb stated the DWP did not pay GMP indexation so again another deliberate lie compiled by DWP officials and in this case to Parliament.
I knew what I was being told was a lie because I started to receive my state pension in 2005 and could see my GMP indexation not paid by my occupational pension each year after that included in my state pension.
The following comes from Civil Service pension information for 2020 on the net which proves the DWP have lied when they say they don't pay GMP indexation..
https:/ /www.civilservicepensionscheme.org.uk/members/pensioners/guaranteed-minimum pension-gmp- reconciliation-exercise/gmp-faqs/
What is a Guaranteed Minimum Pension (GMP)?
GMP is the minimum amount of pension we have to provide for Civil Service pension scheme members who contracted out of the State Earnings-Related Pension Scheme (SERPS) between 06 April 1978 and 05 April 1997.
GMP is not a separate benefit paid in addition to your Civil Service pension, it is paid as part of your Civil Service pension.
How does GMP affect the annual Pensions Increase (PI)?
Pensions Increase (PI) is the annual increase applied to your Civil Service pension and State Pension to reflect changes in the cost of living. You can find more information about PI here. The amount of GMP you have affects the PI applied to your pension.
We apply PI to the whole of your Civil Service pension (including the GMP part) until you reach State Pension age and claim your State Pension. If you reached State Pension age before 06 April 2016 and you were working in the Civil Service before 06 April 1997, the Government pays part of your PI with your State Pension.
Up to 05 April 1988 (Pre88)
From 06 April 1988 and
05 April 1997 (Post88)
GMP increase paid by Pension GMP increase is
applied to
Department for Work and Applied to your State Pension
Pensions
Civil Service Pensions (up to a Applied to your Civil Service maximum of 3%)* pension
* If PI exceeds 3%, the Government will pay the excess amount in your State Pension if you reached State Pension Age prior to 06 April 2016.
I also happen to have a letter from HMRC confirming that the DWP paid part of my GMP indexation which was not paid by my occupational pension scheme.
I gave the PHSO a copy of the letter from HMRC which they deliberately ignored in their report.
This case could turn out to be one of the biggest scandals ever by the DWP because of their refusal to tell people about loss of GMP indexation with the approval of the PHSO. And also by the PHSO for colluding with the DWP.
Both the Work and Pensions Committee and National Audit Office investigated GMP indexation not being mentioned and produced reports in March 2016 just before the NSP started on 6 April 2016 asking the DWP to tell people about the loss of GMP indexation.
As far as I can see the DWP have not made this information available to the public and that for some reason neither the Work and Pensions Committee or the National Audit Office have chased them to find why they have not done what was requested. Another cover up.
What also amazes me is not a single pension professional picked up on the subject. I did mention it to Age UK and Pension and Lifetime Savings Association before it became law but they refused to take up the cause.
Age UK were heavily involved in the PHSO investigation of inherited SERPS.
April 2020