Pension overpayment - provider wants to take back £20k

dunstonh

Sea_Shell said:

dunstonh said:

xylophone said:

Insurance may protect them but the insurers would then go for recovery from you.

So that every one of us with either a DC or DB pension should be taking out insurance against a mistake taken by the Administrator's actuary?

Why would you do that?    You have the ombudsman etc for if you are worse off. 
This is not a case where the OP is worse off.  They have had financial benefits from a mistake and are being asked to return money that was never meant for them.  They are arguing that they should profit from the mistake.   

So what are people supposed to do, if they are, unknowingly, in receipt of such a pension payment/transfer (CETV)?   

Mentally and physically ringfence that money and don't touch it, because it might not be legally yours?    What timescale should one allow, before making plans for the money, just in case?

If a figure is wildly out, it may be obvious, but as was said upthread (IIRC), £20k may not be an obvious error.

On the flipside, how would a layperson ever know they'd been underpaid either?

There is no easy answer.  It's a horrible scenario for someone to find themselves in.

It may have been better, with hindsight, to have spent the money and tell them that it no longer exists and they don't have the means to repay it.   The administrators (or liability insurers) would then have a decision to make on the probability of getting the money back vs the costs incurred.

As we can see in this case, they have already halved the repayment as a means to settle.   As the OP has the money, they have to make a judgement call on whether to attempt to barter it further down, risk court case and costs or settle  on the basis that they are £10k better off than £20k.

xylophone

yes it is extremely frustrating but look at it the other way round.  If the pension company underpaid by £20k but then said whoops, we have spent the money and can't pay you, would that be accepted?

I think you are missing the point that this is a mistake made by a professional body/ via that body's professional adviser.

Underpayment or overpayment is that body's responsibility and insurance to cover that liability should be a legal requirement.

I won't rehearse the arguments again - see my post 

https://forums.moneysavingexpert.com/discussion/comment/80366502/#Comment_80366502

Pat38493

dunstonh said:

I agree that the responsibility should be with the actuaries who made the mistake, and I asked why they weren’t and why they wouldn’t have insurance to protect themselves - they just skirted around that point and  doubled down on the fact that the law states I shouldn’t have got it so it’s on me to return it.

Insurance may protect them but the insurers would then go for recovery from you.    And it doesn't get away from the fact that in most cases, a mistake does not equal a windfall for you.   Hence why they are emphasising that point.

Then per the other argument, the law should be changed so that in these such cases specifically, the insurer cannot do that.

In know we’ve been round this loop before, but it’s also been posted that “change of position” is very restricted in how the define it.  For example, as a normal layperson I would certainly assume that if I made a decision to resign from my job and retire, based on numbers provided, then if someone comes back later and says sorry the numbers were too high, you need to pay some back, my position has changed - I resigned from my job.  I’ve seen it posted that this won’t work because they will say you can just get another job, but if you have made a big decision to retire I don’t think that’s a reasonable position to take.

xylophone

https://www.thisismoney.co.uk/money/experts/article-13654161/TONY-HETHERINGTON-Pension-firm-demand-95-000-error-fault.html

Apropos of my post above, justice for at least one victim of administrative error - and I hope the ombudsman rules in his favour.

Marcon

xylophone said:

https://www.thisismoney.co.uk/money/experts/article-13654161/TONY-HETHERINGTON-Pension-firm-demand-95-000-error-fault.html

Apropos of my post above, justice for at least one victim of administrative error - and I hope the ombudsman rules in his favour.

See this recent determination from the PO: https://www.pensions-ombudsman.org.uk/decision/2024/cas-55100-g3w9/bic-uk-pension-scheme-cas-55100-g3w9

hyubh

Marcon said:

xylophone said:

https://www.thisismoney.co.uk/money/experts/article-13654161/TONY-HETHERINGTON-Pension-firm-demand-95-000-error-fault.html

Apropos of my post above, justice for at least one victim of administrative error - and I hope the ombudsman rules in his favour.

See this recent determination from the PO: https://www.pensions-ombudsman.org.uk/decision/2024/cas-55100-g3w9/bic-uk-pension-scheme-cas-55100-g3w9

Crikey! Although I'm not sure that case involved 'administrative error', the pension administrators processed increases as the trustees told them to...?

Marcon

hyubh said:

Marcon said:

xylophone said:

https://www.thisismoney.co.uk/money/experts/article-13654161/TONY-HETHERINGTON-Pension-firm-demand-95-000-error-fault.html

Apropos of my post above, justice for at least one victim of administrative error - and I hope the ombudsman rules in his favour.

See this recent determination from the PO: https://www.pensions-ombudsman.org.uk/decision/2024/cas-55100-g3w9/bic-uk-pension-scheme-cas-55100-g3w9

Crikey! Although I'm not sure that case involved 'administrative error', the pension administrators processed increases as the trustees told them to...?

As always, cases are distinguished on the facts...but I feel profoundly sorry for the members and their families where they genuinely didn't realise (and could not reasonably be expected to have realised) they were being overpaid. After all, if the 'professionals' charged with administering the scheme didn't spot the problem, why would the 'amateur' receiving the payments?

hyubh

Marcon said:

hyubh said:

Marcon said:

xylophone said:

https://www.thisismoney.co.uk/money/experts/article-13654161/TONY-HETHERINGTON-Pension-firm-demand-95-000-error-fault.html

Apropos of my post above, justice for at least one victim of administrative error - and I hope the ombudsman rules in his favour.

See this recent determination from the PO: https://www.pensions-ombudsman.org.uk/decision/2024/cas-55100-g3w9/bic-uk-pension-scheme-cas-55100-g3w9

Crikey! Although I'm not sure that case involved 'administrative error', the pension administrators processed increases as the trustees told them to...?

As always, cases are distinguished on the facts...but I feel profoundly sorry for the members and their families where they genuinely didn't realise (and could not reasonably be expected to have realised) they were being overpaid. After all, if the 'professionals' charged with administering the scheme didn't spot the problem, why would the 'amateur' receiving the payments?

OK, but the risk of sounding pedantic - the administrators in the BIC case did the job they were told to. It was the trustees back in 1992 not picking up they had to actually change the rules to allow pre-97 excess increases, then the sponsoring employer two decades later deciding to enforce those rules, that were at 'fault'. Oh, and the sponsoring employer persisting and winning on appeal when (on being challenged in court) the case originally went against them...

Marcon

hyubh said:

Marcon said:

hyubh said:

Marcon said:

xylophone said:

https://www.thisismoney.co.uk/money/experts/article-13654161/TONY-HETHERINGTON-Pension-firm-demand-95-000-error-fault.html

Apropos of my post above, justice for at least one victim of administrative error - and I hope the ombudsman rules in his favour.

See this recent determination from the PO: https://www.pensions-ombudsman.org.uk/decision/2024/cas-55100-g3w9/bic-uk-pension-scheme-cas-55100-g3w9

Crikey! Although I'm not sure that case involved 'administrative error', the pension administrators processed increases as the trustees told them to...?

As always, cases are distinguished on the facts...but I feel profoundly sorry for the members and their families where they genuinely didn't realise (and could not reasonably be expected to have realised) they were being overpaid. After all, if the 'professionals' charged with administering the scheme didn't spot the problem, why would the 'amateur' receiving the payments?

OK, but the risk of sounding pedantic - the administrators in the BIC case did the job they were told to. It was the trustees back in 1992 not picking up they had to actually change the rules to allow pre-97 excess increases, then the sponsoring employer two decades later deciding to enforce those rules, that were at 'fault'. Oh, and the sponsoring employer persisting and winning on appeal when (on being challenged in court) the case originally went against them...

I was making the general point that most members can't be expected to know better than professionals (or the sponsoring employer!).