Complaints about the failures of the Scottish Public Pensions Agency have also been lodged with the First Minister John Swinney calling on him to take action over the failures and threatening legal action if heads do not roll.
The problems began with a 2018 court case in London called the McCloud judgment, which found that changes made to public-sector pensions in 2015 were unfair to younger workers. Those reforms were designed to save taxpayers money, since people are living longer and pensions were becoming more expensive.
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However, the government let older staff stay on the more generous old schemes, while younger ones were moved to less generous new ones. Judges and firefighters successfully challenged this as age discrimination, and now every public-sector pension scheme in Scotland — from teachers and NHS staff to police and council workers — must fix the unfairness and compensate those affected.
In Scotland the Scottish Government‘s pensions agency had 18 months to give pension remedy statements to over 200,000 police, teachers, NHS staff, firefighters and local government workers who were estimated to have been affected with a statutory deadline of March 31, this year.
But of 215,000 people affected by the judgment only around 59,000 received the statements needed to get any kind of compensation by the deadline.
Hopes of completing the exercise by the end of July were also described by one SPPA circular as “ambitious”.
And while a new deadline of October 31 was set, as of mid-August, 55,000 staff were still to receive their statement.
Retired police superintendent Martin Gallagher, who leads the Jobs Forgotten group of over 500 members — which helps coordinate efforts for retired officers seeking their pension corrections — has called the entire situation a “national scandal” and said it is well beyond time that retired members receive the pension payments they are lawfully owed.
Mr Gallagher from Linlithgow, who runs his own consultancy firm lodged his own complaint with the Pensions Ombudsman saying that he understood he was to receive funds, amounting to close to a six figure sum, in October 2023 but legislation then allowed for 18 months to comply.
The retired officer who left the force at the end of 2022 with 28 years’ service has told the ombudsman: “I along with all other pensioners saw our payments delayed with no personal communication and in my view breaching the legislation that governed this delay.
“This whole matter has caused me significant stress and suffering and adversely affected my retirement.
“I have spent a great deal of time trying to resolve matters and been treated with contempt by my pension provider.”
He has called for financial compensation for the stress caused by the process and said there should be a written apology.
He said that “no statutory body appears to be tackling the behaviour of the SPPA and they are getting away with behaving with a complete disregard for the law of the land and pension regulations”.
His group has written to the First Minister saying that they have “no confidence whatsoever” in the stewardship of the SPPA by the chief executive Stephen Pathirana and his senior leadership team and “ask that they are removed forthwith”.
And they warned: “Should removal not take place, I and my fellow group members will be seeking legal advice in respect of what action we can bring to force removal and rectification of this matter”.
Following initial concerns from the group over the breach of the deadline, public finance minister Ivan McKee wrote to them in April saying that much of the 18 months provided in the legislation “has been largely absorbed by preparation” and that he “fully understood” the “frustration” of those who have not had had the statements “and he financial impact this has had”.
Ivan McKee (Image: Scottish Government)
And the SPPA chief executive told them: “Our focus continues to be pensioner members who may be in receipt of benefits that are lower than they would be had the discrimination not occurred.”
He said that it had take the decision to “avoid additional delays for other members where it is possible” to provide them with their remedy statements sooner.
The agency has relied on a loophole in the Public Service Pensions and Judicial Offices Act 2022 that states that the date of the delivery of pension remedy statements known as RSSs may also be “such later day as the scheme manager considers reasonable in all the circumstances in the case of a particular member or a particular class of member”.
And in one letter seen by the Herald to concerned pensioners in July, Mr Pathirana said the “discretion” allows an extension to the statutory deadline.
He admitted that even amended deadlines for the end of July were not achievable but that no law breach would be reported to the Pensions Regulator.
“SPPA considers it is critical to ensure accurate RSSs are issued, which unfortunately may come at the expense of timeliness,” he said. “We believe it is preferable to extend our dates in advance to set clear expectations with scheme members and better manage communications.”
He said that at the point of extending the dates “we will ensure we have a robust and transparent delivery plan” and a “communication plan” for keeping staff informed.
But the continuing failure resulted in an online meeting involving the public finance minister and Mr Pathirana on October 15 and minutes state that the SPPA chief refused to intervene to settle a miriad of complaints that have landed with the ombudsman.
The draft minutes state that Mr Pathirana “suggested due process should be allowed to follow”.
While the minister was asked if the big increase in workload for the SPPA had resulted in an equivalent rise in staffing to deal with it, according to the record, [Mr McKee] explained “staff numbers are not necessarily the answer”.
The document said that Mr Pathirana said the SPPA “needed to recruit” and “needed to train” and that being located in Tweedbank in the Scottish Borders had brought “recruitment issues”.
It states the SPPA had explored hiring consultants but it cost £3000 a day while a team of ten were dedicated to dealing with the pensions remedies.
One teacher, who is fighting for nearly £30,000 that he says he is owed, told The Herald: “Mr Pathirana has to go for presiding over this shambles of a delivery strategy.
SPPA chief Stephen Pathirana (Image: SPPA)
“And there needs to be a Scottish Parliamentary enquiry into the SPPA’s shambolic behaviour which has badly let down tens of thousands of public pension retirees in Scotland.
“The root of the problem has been that instead of confronting and rising to the scale of the undoubted challenge of delivering the remedy to those most in need, an 18 month legislative window for delivery was frittered away by the organisation with apparently only last minute planning.
“Individuals are now left hanging in indefinite financial limbo as deadlines are constantly moved back by the organisation at the last minute
“And these protracted delays are therefore wasting public money.”
The Jobs Forgotten group say the majority of police pensioners with unresolved situations are individuals who retired from the service through ill health or through being injured on duty so badly they could not remain in the police.
“How the SPPA can treat those who have essentially been disabled while keeping the people of Scotland safe is beyond comprehension,” said Mr Gallagher of the group
“The SPPA’s strap line is ‘serving those who service Scotland’. The 550 pensioners from the police and fire service who have joined my campaign group all feel the agency has singularly failed in its stated mission.”
In a circular relating to the Scottish police pension scheme members, believed to be among the first to get remedy statements, SPPA chief executive Stephen Pathirana said: “Our focus continues to be pensioner members who may be in receipt of benefits that are lower than they would be had the discrimination not occurred.
“The levels of complexity have resulted in much of the original delivery timeframe being absorbed by planning and working through complexities extending beyond the scheme rules. This has affected the overall timescales for delivering across all schemes.
“We are sorry that these issues mean that some members will receive their [statements] later than anticipated and recognise the impact this may have.”
The SPPA said that the £1.67bn costs estimate was based on historical data and that the final discrimination compensation bill will be dependent on how pensioners respond to their remedy statements.
SPPA deputy chief executive Kate Thomson-McDermott said: “SPPA will of course fully cooperate with investigations where the appeals are accepted by the Ombudsman for consideration.
“The delivery of the remedy remains a key priority for the SPPA and, while we continue to make progress, as with other public sector pension scheme providers, challenges remain.
The Scottish Government was approached for comment.