Can they take back pension overpayments?

dillanddodge

My Dad was receiving state pension, his own work pension and a pension from my Mum's work. My Mum died in 1990 and he has been receiving her work pension ever since.

I called the trustees of Mum's work pension scheme to advise that my Dad has passed away 11.8.08. It turns out that instead of receiving a widower (spouses) pension from them, he had been receiving the employee pension.

Can the trustees claim back the money they have overpaid over the last 18 years?

My Dad has left net assests worth around £65000.

I am the executor and sole beneficiary of the estate

Many thanks.

Debt_Free_Chick

Yes they can as he was receiving a benefit he was not entitled to.

It could be that when mum died, he should then have been receiving a spouse's pension of a lower amount.

Are they going to contact you about it? Wait until they do. If there's a problem, contact the Pensions Advisory Service for help with this.

Darts

In cases involving overpayments, the Pensions Ombudsman has said in the past that while there is no entitlement to keep overpayments, the Scheme should be flexible about how it claims the money back. This has meant the individual concerned being given at least as long as it took for the Scheme's error to be discovered to repay what they weren't entitled to, and for no interest to be applied. As this case involved someone's estate, the first part of that probably won't apply, although the Scheme should still show some flexibility about repayment and not demand that a punitive rate of interest be added.

MikeJones_2

Darts wrote: »

In cases involving overpayments, the Pensions Ombudsman has said in the past that while there is no entitlement to keep overpayments...

HMRC rules introduced with effect from 5th April 2006 ('A-Day' or 'pension simplification' as it became known) make overpayments like the one described in this post an unathorised payment which the scheme must attempt to recover or face the consequences. New rules were introduced since 2006 which have granted an easement if the unauthorised payment was under £250.

The logic behind 'overpayment' recovery is simple and obvious, although it may sometimes appear 'unfair'.

I'm sorry to hear of this unfortunate (but surprisingly common) situation, but do recommend you follow Debt-Free-Chick's advice that you contact TPAS for assistance (it is FREE) as an experienced TPAS advisers will held mediate your situation.

Mike Jones

I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

missjennifer

On a similar topic....

I have had my pension over paid by a previous employer (they continued paying even after I had left) - 14 months on, they are requesting this back - should this be my responsibility, or as it was their mistake, should they not be able to do this?

Any advice welcome!

In addition, the company mentioned has now been sold to new owners!

dunstonh

should this be my responsibility, or as it was their mistake, should they not be able to do this?

mistakes happen and they should be corrected. Currently you have money you are not entitled to. Think about how you would feel if it was the other way round.

JayZed

Of course they should be able to get it back - it's their money, not yours!

missjennifer

OK, but in addition, they are recouping the value they put IN rather than what it is now worth - removing even more from the value of my own fund, is that correct?

I am now transferring out the balance to a new pension - hence I am left with very little!

Debt_Free_Chick

missjennifer wrote: »

OK, but in addition, they are recouping the value they put IN rather than what it is now worth - removing even more from the value of my own fund, is that correct?

I am now transferring out the balance to a new pension - hence I am left with very little!

They should put you in the position you would have been in, had they not made the mistake. You should write and acknowledge that they wish to correct the mistake but ask them to do so in a way that ensures you are no worse off and ask that they put you in the position you would have been in, had they not made the mistake.

missjennifer

Thanks all for your help!

JayZed

Debt_Free_Chick wrote: »

They should put you in the position you would have been in, had they not made the mistake. You should write and acknowledge that they wish to correct the mistake but ask them to do so in a way that ensures you are no worse off and ask that they put you in the position you would have been in, had they not made the mistake.

Interesting... what if the value of the investments had risen rather than fallen? Woudl the company be entitled to take back the extra cash plus the gains, thus putting her in the position she would have been had they not made the mistake?