Employer trying to reclaim overpayment of pension contribution in lump sum

RoseNotwen

I got offer of a new job in April (should start in September but that's another story) and when I pre advised my employer it transpired that they had been over contributing into my private pension scheme for the last two years. Beginning of May I asked him to cancel their direct debit immediately howeve today's conversation makes it evident he didn't do it. The DD has been cancelled and his initial 'suggestion' was that the money would be taken out of my final salary. Needless to say I said no.

A little more background, I reduced my hours in 2012 and I discussed with my then manager that I would continue to pay a higher amount in to my pension and gave her the paperwork necessary for her to reduce their DD contribution (unfortunately none of this is handled by our payroll). She has subsequently left and now I am dealing with a new manager who in May said he couldn't find any paperwork however I made the request above and was waiting for a final figure for the over payment which he provided today.

The final amount is £400+ and I'm not thrilled about paying out of my own pocket to correct their mistake, especially out of my salary when it's the difference between eating and not. Where do I stand and what are my options?

quotememiserable

Why not ask them to draw it back from the pension fund where it was overpaid to?

McKneff

Quotememiserable's suggestion seems the most sensible.


Other than that, suggest you set up a payment plan over say 6 months.

RoseNotwen

That's a conversation I have to have with my pension provider (Standard Life). Advice I've had elsewhere is that it's possible but dependant on the company involved. There are also some tax implications, that I don't really understand, to me and the organisations (which is a charity). I might not balk at going as far back as April, settling one financial year, but paying out for two because of an oversight by management seems unfair, especially when you consider my conditions around pension would mean I could only backdate into the scheme one month. I realise that the two things are wholly separate but I feel the situation is weighted too far in their favor.

PensionTech

I would have to look into this (private pension regs not my forte) but I've read enough Ombudsman cases to think you would have a case to stop them from claiming it back from your salary all in one go - or perhaps at all. The Ombudsman has previously said that where an overpayment is reclaimed, the appropriate repayment period is at least as long as the period over which the overpayment was made in the first place - and it sounds like that's a couple of years. Hold on until more of the pension gurus reply to this thread, I'd say...