IT projects to blame for pensions disaster

Link: Montagu faces grilling over Pensions debacle

Between 1996/1997 and 2000/2001, the Revenue failed to warn taxpayers whose National Insurance contributions fell below a certain level that they would have to make additional payments to qualify for a full state pension.

Normally these taxpayers would be contacted, informing them that they would need to make additional payments.

But the Revenue has said that it was so busy with the work involved in introducing its National Insurance Recording System 2 (Nirs2) computer system, that it decided not to issue the warnings in order to lighten its workload.

‘There is no statute or law that says we have to issue these letters, it is done out of goodwill,’ a Revenue spokeswoman told VNU News Centre.

‘Our National Insurance system is one of the largest repositories of personal information in the world. Getting this done was a huge task, and there were higher priorities, such as making sure people received their pensions,’ she added.

The £144m Nirs2 project has been dogged by controversy. Accenture, which built the system was forced to pay £3.9m in compensation for delays in 1997 and 1998 that held up payments worth £1.5bn to pension companies.

The decision to reintroduce the warnings was taken last month. The Revenue has also extended the period over which additional payments can be made to 2008, as a gesture of ‘goodwill’.

The Revenue reckons that around four million people will receive notices, and are likely to be asked for an extra £250.

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