ROYAL MAIL is having to recalculate the pension entitlements of more than 120,000 employees after sending out wrong information in virtually all of the annual statements for its workforce.

Pensions statements were issued last month, but most of them failed to take into account a large amount of overtime pay and bonuses, an important part of pensionable pay, earned by employees.

The organisation is having to reassess the amounts and send out new statements in a move that could trigger a fall in confidence in the administration of the pension scheme. The problem will also arouse greater concern among Royal Mail employees because of widespread fears about pension provision.

Although the discrepancies in the way annual pensionable pay at Royal Mail has been calculated are relatively modest — the average discrepancy is a few hundred pounds — the fact that inaccuracies have hit virtually all members of the scheme has concerned the main postal union.

Dave Ward, deputy general secretary of the Communication Workers Union, said: “In today’s chaotic pension climate, it is important that our members’ benefit illustrations are based on accurate and up-to-date information.

“Figures that Royal Mail sent out last month were inaccurate and we have insisted that they reissue correct assessments. We don’t believe there is a significant problem, but if ever there were a time not to make a pig’s ear of pension illustrations, it’s now.”

A spokesman for Royal Mail said: “We have written to everyone in the scheme and they will soon be getting a revised statement. By and large, the inaccuracies were small, but we want the snapshot of pay and benefits, which the annual statement provides, to be accurate.”

Royal Mail blamed the mistake on the computer link-up between its pensions calculations operation and its payroll department. It is believed that overtime and bonuses from last November to March disappeared from the reckonings. The organisation has changed some software to prevent similar mistakes.

A few weeks ago another computer glitch in Royal Mail disrupted payments for hundreds of thousands of pensioners and benefits claimants when the computer system serving all post office counters began paying out too much. Some recipients were paid quadruple the amount that they should have received. The system had to be closed down for several hours to rectify the problem. Royal Mail said that there had been difficulties with the transfer of overnight data from banking suppliers.

• Royal Mail will soon be told by the postal regulator how it should compensate business customers for poor service. The organisation has caused controversy in the business community by only compensating customers who have paid the majority of their bills within three weeks — a deadline that is seen by many companies as impossibly tight.

  Business customers are entitled to be reimbursed for a small percentage of their bill if service falls below a certain standard. Earlier this year Royal Mail missed all 15 of the service standards required by its licence.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts