Employer overpaid into pension

yoyomummy

My employer overpaid into my (and many others) pension over a period of time. They then realised, stopped the overpayments and arranged a pension holiday whilst still claiming my contributions through salary as gradual repayment of the overpayment.

However I have now left the company part way through this repayment, with technically still had about £1500 of repayment left. This money is sat in my pension fund and now my ex-employer has written to me and demanded I repay it direct to them either in full or in installments. Problem with that is that we are beyond broke. I left their employment because of bullying and medical issues, not because I didn't need the money. We are going more into debit every month until I get new work when my medical stuff is sorted. I just can't add this debt to everything else. I have no issue with paying it back out of my pension, but it would seem this isn't possible. Can they really make me pay it back out of my pocket?

Any advice would be incredibly welcome please x

PuzzledDave

***Disclaimer -- I am not an expert in pensions or law***

Most likely yes they can. You could try writing back and explain you have no direct control over the overpayments and they should take this up with the company they gave the money to... but I suspect that's not going to wash. At which you have two options:

1) Refuse to pay outright and insist they deal with the company they gave the money to, probably get taken to court and you will either fight and pay a solicitor to argue your case or simply lose and have to repay.

2) Agree to pay.

If this was me, after at least trying to get them to speak to the pension company. I would write back along the lines of: I acknowledge the overpayment but as yet cannot pay back in meaningful installments as you are yet to resume regular work. Until such time you can make token payments of £1.

Also, I would strongly suggest going to the debt free wannabe board as they are great at suggesting ways to cut your current outgoings.

atush

They would be unliely to take you to court and get a repayment order if you are out of work. Unless youhave assets they could seize.

Why didn't you claim constuctive dismissal over the bullying? Did you go thru the company's complaints proceedure? why didn't you take off on sick pay while still employed as you had medical issues?

You may have to contact them and agree repayment once you are working as you didn't deal with the bullying/sickness at the time.

Unless you have just left, the perhaps you could contact an employement solicitor. Perhaps if you filed a claim for constructive dismissal, they could negotiate that you drop it if the company drop their claim on the pension overpayment?

pinkteapot

Effectively this is as if your company loaned you money, without you asking them to.

Some companies do season ticket loans, where they pay for a season ticket and you repay over twelve months through your salary. But you apply for that and the paperwork says that if you leave you'll have to repay any balance remaining.

Without the company having got your agreement up front to repay this money, I don't see how they can come after you for it. They've paid money into a pension which you can't withdraw cash from. I don't think a judge would look too kindly on it. It was their mistake.

I'm not a legal expert either though - you really need some proper advice. Can you find a local solicitor who'll do a free consultation to set out what your position is?

Prothet_of_Doom

Think out of the box. Tell them you'll transfer that Pension money to a separate SIPP in your name, and when it matures, you'll pay them back with interest added at the current Savers rate (0.05% ?) between now and then.

yoyomummy

Thanks for the help people. I could have gone off long term sick easily, but didn't choose to do that as I didn't want to mess my boss around given that I had decided I wasn't going to return permanently. Was trying to do the right thing, wishing I'd just rinsed them now! Constructive dissmissal was something I considered, but I called 2 solicitors who both were unconvinced of my chances and basically just sent me packing. The problem is that the worst of the bullying went on with a temp manager whilst mine was on mat leave, if I'd left straight away at that point it would have been a very easy case. But I soldiered on and to be honest was too worn down (and heavily pregnant) to consider any court action. I hoped after my maternity leave and the manager having left that I would be ok, but I wasn't. It was like my whole year off hadn't happened and all my stress and problems just returned right back where I'd left off and although the offending manager was gone, my manager didn't care and even had me sift through a load of 'statements' on my first day back, statements written by my old manager about me that were horrific. There were a few other factors too, but the solicitors I spoke with weren't convinced there was enough of a specific reason why I had to leave and therefore claim constructive dismissal.

I'm not sure what a SIPP is, but I'm guessing you basically mean telling them I'll pay them back when I claim my pension? I like that idea.

Having worked in HR there, I know they are very unlikely to pursue it too far as it would cost them more than it's worth, but just don't want to live with the stress of wondering whether there will be a bad letter in the mail every day.

Such a pain and something that's causing way too much stress. I should have just gone off sick!

Thanks again for all the help, I'll keep checking on here and may just book a CAB appointment too.

Greeniron

If you haven't done so already you could contact the Pensions Advisory Service on 0845 601 2923, who could provide general info on your options in respect of the overpayment.

magpiecottage

I agree TPAS is the first place to go. It is free!

System

It's either a mistake that can be rectified by the pension provider, or it isn't, in which case they will have to lump it.
The money wasn't paid to you, it's not yours, it belongs to the pension provider. You have no power to access it, and no obligation to assume responsibility for a mistake made between two other parties.