Following the computer blunder which caused Inland Revenue to erroneously pay out over £80m to pensi...
Following the computer blunder which caused Inland Revenue to erroneously pay out over £80m to pension scheme members and worries over who is to foot the bill, the Association of British Insurers claims it is working closely with the taxman to ensure individual policy holders and insurers do not suffer financial loss from the error.
Up to 175,000 customers are estimated to be facing the prospect of repaying cash accumulated over the last four years. But the problem has been acerbated as many mistaken payments were invested in plunging stock markets and are worth roughly 40% less than the Revenue originally paid out.
The errors arose when the computer system failed to register the employers who had sent multiple annual returns which generated duplicate payments of rebates.
In a letter to the ABI Director General Mary Francis, Inland Revenue claims it has put in place additional checking procedures for future prevention.
The letter also states that Inland Revenue has "a legal obligation to recover the overpayments, but [they] also have the ability to make good losses which are incurred as a result of Departmental error or unreasonable delay.
"We now need to know exactly how redress can be obtained by customers and providers. Our hope is that the Inland Revenue will be in a position to notify both the industry and our customers of this as soon as possible, adds Francis.
"The recovery of duplicate payments will be shown as an adjustment in individuals' annual pension statements. We are pressing the Inland Revenue to include with the statements a clear explanation of any adjustments that affect them."
It is still unclear who is to absorb the losses from the computer glitch. According to a press report Inland Revenue is only at the stage where they are informing affected individuals of the situation.
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From 1 April 2019
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