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Pension Provider Suspends Payments to Retired Teacher, Unconvinced of Her Vital Status

Eileen McGrath, an 85-year-old retired teacher, has faced significant financial challenges due to her pension payments being erroneously halted on four occasions. The pension provider, Teachers’ Pensions, responsible for administering payments on behalf of the UK government, repeatedly made the mistake of erroneously declaring McGrath as deceased, causing her considerable distress and financial hardship.


The ordeal began when McGrath received two letters in November from Teachers’ Pensions, ambiguously inquiring about her status as if she were deceased. In response, she promptly contacted the pension provider to clarify that she was very much alive. Despite her efforts, two more letters arrived a week later, posing the same macabre query. McGrath, frustrated by the persistence of this error, wrote back to reiterate her continued existence.


The gravity of the situation became apparent just four days before Christmas when McGrath discovered that her pension payments had not been deposited into her account. Astonishingly, even the widow’s pension, a payment she also receives from the scheme, was abruptly halted. Both payments were eventually rectified on January 2nd, following McGrath's formal complaint.


McGrath recounted the distressing experience of being required to prove her existence since 2020, facing the threat of losing her income each time the pension provider made an erroneous death declaration. During the second lockdown, she missed letters that were sent to her son's house to verify her circumstances. The realization that there was a problem only occurred when her pension payments were not received.


This recurring issue stems from a vetting procedure employed by Teachers’ Pensions, where beneficiaries are routinely cross-referenced with the death register to prevent improper payments. The Department for Education (DfE), overseeing Teachers’ Pensions, explained that even if personal details differ, entries in the death register may be mistakenly linked to scheme members.


The DfE clarified that once a potential match is identified, beneficiaries may be asked to confirm their status annually. However, the system, managed by Capita, does not log disproved links, and recipients are not informed of a specific deadline or the consequence of payment cessation if they fail to respond within 28 days. The rationale behind this omission, according to a spokesperson, is to "avoid causing upset."


McGrath expressed her frustration at the lack of clarity in the letters, arguing that they failed to emphasize the importance of contacting the pension provider if circumstances remained unchanged. She questioned the logic of not warning pensioners about potential payment suspension within 28 days, asserting that the current approach is akin to "Alice in Wonderland territory."


Steve Webb, a partner at pension consultants LCP, highlighted the need for providers to thoroughly investigate potential matches on the death register before suspending payments. He emphasized that while it is crucial to prevent payouts to deceased individuals, there should be a high level of certainty before stopping pensions. Webb suggested utilizing rich data sources to ensure accuracy and avoiding unnecessary checks for individuals who have already verified their status.


Following The Guardian's inquiry into the process, the DfE announced that it would make an exception for McGrath, ensuring that her name would be dissociated from the deceased individual to prevent further distressing incidents. McGrath, although financially resilient, expressed concern for others who may not have sufficient savings to weather such incidents, emphasizing the unpleasant and distressing nature of being periodically told that one is presumed dead.


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