Fraud-busting Fund's Clampdown Triumph

The following is reproduced from an article by Jason Conway that appeared in Professional Pensions.

The West Midlands Metropolitan Authorities Pension Fund has claimed victory in a three-year clampdown on pensions and benefits fraud after cooperation with contributions and benefits agencies and the simple use of Christmas cards. According to chief pension administration officer Mike Woodall, growing credit card fraud initially sparked doubts about the security of some pensioner payments. Traditionally, Funds such as West Midlands had depended on life certificates, which required signatures from doctors that pensioners on the payroll were still alive to collect benefits. But Woodall doubted the security of such arrangements and felt the process was uncaring and might distress innocent pensioners by reminding them of their mortality.

Instead, West Midlands developed an information sharing arrangement with the national contributions and benefits agencies. It has also monitored special Christmas cards sent to consenting pensioners and cancelled claims if the cards are returned by postal services. The local authority scheme claims the initiative has boosted prosecutions for bogus pensions claims and rooted out fraudsters. The fund currently serves 50,000 pensioners and pays out about £151m in pensions annually.

Woodall said, "Since we embarked on this project three years ago we have seen an increase in successful convictions for fraudulent claims and have been able to pin down the limited number of offenders out there. You can never be too vigilant and we are working with our internal audit committee to tighten things up still further. With a simple postal card scheme we can monitor when pensioners are no longer living at their original address or if they have passed away simply by monitoring Christmas cards returned to us by the postal services".

Woodall has been surprised at some of the pension fraud cases which have come to light at West Midlands. Notable cases included a fraudulent pension claim from a house which was being used as a brothel and a fraud case involving a local bigamist. "In one case we uncovered a pensioner who was so active he wrote to us three times after his death," said Woodall.

He praised the role of the contributions agencies in the project and said the Fund was considering increasing checks of its overseas pensioner claims.

Further Information on Fraud and the Fund