A pension problem - this can't be right... can it?

Fabuleuse

Hello MSE people, I'd appreciate some advice please...

I've been speaking to my Mum today, and she's had a letter from one of my late Dad's pension companies.

When Dad died some 13 years ago he had various policies and pensions etc in place. Mum duly sent a copy of his death certificate out to them all, and they were dealt with in various ways. One of them who has been sending money to Mum on a monthly basis has just written her a letter saying oops, sorry, we've been overpaying you because we didn't know your husband was dead, can we please have your cheque for £15100?

Quite apart from the fact that I can't quite believe that they expect her to write out a cheque and do no more about it, I also don't think they can legally ask this of her.

The company that's written to her, I'll call them A, took over the original company, FL, some years ago. The death certificate was sent to FL. Right from the start all correspondence has been sent to Mum in her name only, and this continued when A took over. Also, the money is paid into a bank account in her name only.

I would argue that both FL and A absolutely do know that Dad is dead. If overpayment has been made it dates right back to when FL started paying it. It's their mistake. And, when A took over FL they should have properly audited what they were taking over, so they are also at fault for not discovering the overpayment earlier.

Do you think they're really within their rights to stuff up so spectacularly and then expect my Mum - who is a widow and a pensioner - to repay £15000, the very money that they are paying her to live on?

Thanks in advance!

Fabuleuse

xylophone

Does your mother have a letter from FL acknowledging receipt of your father's death certificate and showing the calculation of her widow's pension?

Fabuleuse

That's a very good point, Xylophone, I'll ask her to dig out any relevant paperwork. Although, I think the fact that correspondence began to be addressed just to her does rather suggest that they knew...

kidmugsy

Suppose it is their mistake, it is also their money. That means that your mother owes it to them. They can't, however, reasonably expect her to write them a cheque instantly.

dunstonh

Quite apart from the fact that I can't quite believe that they expect her to write out a cheque and do no more about it, I also don't think they can legally ask this of her.

They can ask for the money back. A mistake does not give legal entitlement. However, they cannot insist on it in one go.

The normal process is to agree a repayment plan. Given the length of the overpayment, you would expect a fairly long repayment period. Or alternatively, sometimes they will negotiate a reduced settlement for payment in one go. i.e. if you can say she has limited funds and can't afford to pay it back without leaving her in financial hardship and there is virtually no estate and make an offer to pay a reduced amount (but dont say how much) they may accept that and come up with a figure. However, they do have the right (and often will) ask for evidence of her financial position.

PensionTech

You may also be able to argue that the statute of limitations applies if they should have been aware of the error earlier, which would mean that they could only ask for the last 6 years' overpayments - but you would need an awful lot more detail about what happened and how it happened. The first step down this road would be putting in a subject access request under the Data Protection Act to obtain all the records they hold on your parents (your mother would have to do this, unless you have Power of Attorney for her).

I'd also wonder why, if they really were unaware that he was dead (which sounds a little suspect given what you've said), they didn't do any member tracing. It's common for pension schemes to do regular tracing exercises to ensure that all of the pensioners on their books are still alive; this consists of the scheme sending out a "Certificate of Existence" which the pensioner must sign, and have witnessed, to prove he is still alive (or his pension will be suspended). Not having done that for 13 years sounds a little negligent unless your father was very young.

I'd start with the subject access request and see what they did know and what they didn't before considering what/whether to fight.

But yes, the starting position is that they legally have a right (in fact a duty, if it's a trust-based scheme) to try to reclaim overpayments.

saver861

There was a very similar thread on here a little while ago. Very similar circumstances of overpayment.

Generally the premise is that if it is an error then the company has entitlement to their money back. However, if the error is solely on the part of the company then I would be arguing strongly against paying the full amount back ..... and certainly not in one cheque.

However, that would be a case of proving they were dutifully informed of the death at the time. The question would also arise why, having sent a death certificate, that your mum continued to accept the payments without further question. If it is overpayment due to a mis-calculation then that would further be the responsibility of the company certainly one I would challenge.

You may well have to pay back some of the money, but it depends on the overall circumstances as to how much you can get deducted for their negligence, if that could be proven.

molerat

TPAS offer advice, keep them in mind if needed
http://www.pensionsadvisoryservice.org.uk/

missile

You are quite right the company would appear to have been negligent. However, your mum must have been aware she was not entitled to continue receiving this money after your fathers death?

dunstonh

I suspect what has happened is that the policies were set up on two different client files. Not uncommon where legacy systems and new systems have later come in to find a duplicate entry. When the death cert arrived, they found one client file and dealt with all the policies under that. Later data cleansing has found the other policy on the other file.

You are quite right the company would appear to have been negligent. However, your mum must have been aware she was not entitled to continue receiving this money after your fathers death?

And that is the thing that usually means that reasonable expectation cannot be used to justify keeping the money. Not impossible but it will rely on the documentation issued at the time.

saver861

missile wrote: »

You are quite right the company would appear to have been negligent. However, your mum must have been aware she was not entitled to continue receiving this money after your fathers death?

Well it could be the case that she would have been entitled to some of the money - it may have been a miscalculation on the part of the company. The OP does not state that detail.