V-c pensions laid low by millionaires' bug

Fat-cat vice-chancellors may have finally got their comeuppance, thanks to a software glitch that has left their pension provider unable to process their six-figure salaries.

In the latest of a list of hitches afflicting the public sector's private partner Capita, the software used to collect pay data from universities under the Teachers' Pensions Scheme cannot compute any salary above £99,999.

When payroll departments make their annual returns, the software automatically moves the decimal point one step to the left for all salaries hitting six figures, so a salary of £110,000 would be returned as just £11,000.

The glitch (dubbed the "millionaires' bug" after the millennium bug) was discovered by a vice-chancellor whose Christmas holiday was ruined when he used a new facility on the Teachers' Pensions website to check his pay-outs.

"I thought I would lift my spirits and stick my numbers in," he said. "But I was depressed to see they had made an error in my service record. It was only several days later when I checked with personnel that I saw that the salary was out by a factor of ten."

The Department for Education and Employment, which commissions Capita to run the scheme for 1.4 million members, mainly in the schools sector, admitted the error but said it was unlikely to have left a massive hole in people's pensions.

"Employers should contact Teachers' Pensions directly, which will update the record manually. This will ensure that the correct contributions are received from the employer and that the correct benefits are paid out upon retirement."

TheDFEEspokespersonsaid that Capita's contract was under review.