Teachers pensions say my husband needs to repay £18000!

phlebas192

LandM1 said:

Yesterday my husband received a letter from Teachers Pensions stating that 15 years ago he was paid £18000 too much pension. Apparently this is supposed to have happened over 3 years. 

I think the aspect to pursue here is that civil claims have to be pursued within 6 years. Any over payments made prior to 6 years are unlikely to be legally enforceable. So that should greatly reduce the amount they could legally claim. If all the overpayments occurred within a 3 year period starting from 15 years ago then I doubt they have any legal claim.

MetaPhysical

Do we all have to live in fear of a letter on the doormat demanding the repayment of tens of thousands of pounds just because they "got it wrong"?  How prevalent a problem is this?  It appears to me there are no consequences to the pensions provider "getting it wrong" and they just demand the money back, ruinously to the pensioners in question in some cases who can't just go back to work and start earning money again in many cases.

bjorn_toby_wilde

MetaPhysical said:

Do we all have to live in fear of a letter on the doormat demanding the repayment of tens of thousands of pounds just because they "got it wrong"?  How prevalent a problem is this?  It appears to me there are no consequences to the pensions provider "getting it wrong" and they just demand the money back, ruinously to the pensioners in question in some cases who can't just go back to work and start earning money again in many cases.

Quite simply, yes we do, although it’s not that common.

It's not something that keeps me up at night but it’s certainly not impossible.

My pension administrator sent me a valuation about six months before my planned retirement that was considerably lower than all the previous figures they had sent me. At that point I was pretty much committed to early retirement and it came as a big shock.  They even included some wording along the lines of “we note that this is lower than previous estimates you have received but this is due to changes to factors made by the trustees”.

I queried this and began a complaint and at that point they admitted they’d made an error in the calculations and revised the figures. I can only assume the sentence I quoted above was a lie to cover up the fact that they couldn’t at the time explain the discrepancy.  Hence my distrust of these administrative companies.

Moonwolf

MetaPhysical said:

Do we all have to live in fear of a letter on the doormat demanding the repayment of tens of thousands of pounds just because they "got it wrong"?  How prevalent a problem is this?  It appears to me there are no consequences to the pensions provider "getting it wrong" and they just demand the money back, ruinously to the pensioners in question in some cases who can't just go back to work and start earning money again in many cases.

I must admit, I don’t fully where these issues all appear and why they aren’t noticed. I have 3 DB schemes. They are all “defined benefits” as the term says, that is the benefits I get were described in my paperwork or maybe there are later changes that are documented. I have spreadsheets and have compared my benefits calculations with the figures I am given and they match to pennies. 

I suppose there might be issues in the compounded growth or any actuarial reduction but usually there are tables, or am I missing something?

For example, I have a 1/60th final salary scheme which was worth £2,883.02 p.a. on 30/04/2004, this matches my contributions and pensionable pay for the period and I have the letter at the time, it has been bought out and my most recent letter has the same figures. It will have grown by CPI (capped in at. 5%) since then and will pay out in December this year. I am using a figure of £5,100 on my spreadsheet and if the figure I get is much higher or lower I would query.

Fermion

Given that the error my be as a result of incorrect EOYC data being sent to the TPS administrators by the Education establishment, It's worthwhile formally writing to the TPS (by register post) requesting copies of the all of the formal calculations and copies of the EOYC accountant approved documents submitted at the time showing proof of the over payment.
See REPORTING ACCOUNTANT GUIDANCE TP05 (FY24/25 Version 1) Version https://www.teacherspensions.co.uk/-/media/documents/employer/factsheets/eoyc/tp05-2024-2025

Interesting that under TP05 reporting rules the TPS cannot bring a claim for negligence/errors against the Schools "Reporting Accountant" after 4 years!

"5.3 Any claims, whether in contract, negligence or otherwise, must be formally commenced within 2 years after the party bringing the claim becomes aware (or ought reasonably to have become aware) of the facts which give rise to the action and in any event no later than 4 years after relevant report was issued (or, if no report was issued, when the accountant accepted the engagement in writing). This expressly overrides any statutory provision which would otherwise apply."

So sounds like they can't bring a claim against the school but they are trying to recover the funds from the pensioner. 

We had a number of issues about 8 years ago with my wife's TPS Pension due to maladministration by a college she was working at on a part-time basis after taking her main Teachers Pension. Capita are not the easiest organisation to deal with. 

Might be worthwhile taking legal advice. 15 years is a very long time.

DRS1

Moonwolf said:

MetaPhysical said:

Do we all have to live in fear of a letter on the doormat demanding the repayment of tens of thousands of pounds just because they "got it wrong"?  How prevalent a problem is this?  It appears to me there are no consequences to the pensions provider "getting it wrong" and they just demand the money back, ruinously to the pensioners in question in some cases who can't just go back to work and start earning money again in many cases.

I must admit, I don’t fully where these issues all appear and why they aren’t noticed. I have 3 DB schemes. They are all “defined benefits” as the term says, that is the benefits I get were described in my paperwork or maybe there are later changes that are documented. I have spreadsheets and have compared my benefits calculations with the figures I am given and they match to pennies. 

I suppose there might be issues in the compounded growth or any actuarial reduction but usually there are tables, or am I missing something?

For example, I have a 1/60th final salary scheme which was worth £2,883.02 p.a. on 30/04/2004, this matches my contributions and pensionable pay for the period and I have the letter at the time, it has been bought out and my most recent letter has the same figures. It will have grown by CPI (capped in at. 5%) since then and will pay out in December this year. I am using a figure of £5,100 on my spreadsheet and if the figure I get is much higher or lower I would query.

I think one problem is that most pension scheme members don't do what you do.

Indeed most people wouldn't know where to start.

So they just assume the administrators know what they are doing and got the figures right (or indeed are paying the right person).

99.9% of the time they do.  But administrators employ human beings and human beings can make mistakes.  I know I have.  Those mistakes can cost money - sometimes a lot.

The scheme should not be penalised for those mistakes.  It needs that money to pay the right people the right amount.

And let's not forget that being over paid means the member got money to which they had no right. Should the fact that they are not as numerate or diligent as you mean they get to keep it when you wouldn't?

Sure in this case there may be a Limitation Act defence - we don't know what the mistake was and whether it should have been uncovered before now.

af1963

...where these issues all appear and why they aren’t noticed ...

Schemes merge and split, and people who joined and left at different stages may have different entitlements.  (Even a single individual can have multiple tranches of pension to which different rules apply about pension age, increases in deferment, increases in payment, lump sums, treatment of AVCs, etc.)

The terminology used is completely unfamiliar to most people. The detailed calculations are usually not provided and even if they were, would mean nothing to most members. 

Companies save a bit of money on the admin by outsourcing it to the cheapest bidder, often changing every few years, sometimes relying on staff who are halfway across the world, not very well trained, or with a rudimentary grasp of English. 

Universidad

DRS1 said:

administrators employ human beings and human beings can make mistakes... The scheme should not be penalised for those mistakes. 

A good principle, but we live in a world where pension schemes are increasingly outsourced to essentially incompetent subcontractors, and a total lack of consequences for mistakes further incentivises this. 

Let's not forget that overpayments get clawed back, but you have essentially zero chance of identifying or clawing back underpayments. 

A mistake that is unpunishable and saves a company or scheme money isn't a mistake, it's a windfall. 

I think all clawback should be from the administrators who made the mistake. That would disincentivise incompetent staff and processes, and provide security for both members and the scheme. It would raise the costs of administration, no doubt. But it's pretty clear that we're getting what we pay for right now.

DRS1

Universidad said:

DRS1 said:

administrators employ human beings and human beings can make mistakes... The scheme should not be penalised for those mistakes. 

A good principle, but we live in a world where pension schemes are increasingly outsourced to essentially incompetent subcontractors, and a total lack of consequences for mistakes further incentivises this. 

Let's not forget that overpayments get clawed back, but you have essentially zero chance of identifying or clawing back underpayments. 

A mistake that is unpunishable and saves a company or scheme money isn't a mistake, it's a windfall. 

I think all clawback should be from the administrators who made the mistake. That would disincentivise incompetent staff and processes, and provide security for both members and the scheme. It would raise the costs of administration, no doubt. But it's pretty clear that we're getting what we pay for right now.

I am not so sure about the underpayments bit.  You usually only see mention of it on here when someone gets a lump sum payment for a pension they should have received previously and complain about the tax deducted from it.  So someone can tell them the payment can be spread for tax purposes over the years the pension was due.

You also have people talking about being traced by pensions they had lost.

So I don't think it is fair to say that schemes are sitting there gloating over the money saved by making a mistake and "losing" someone's pension or paying them too little.

I am also not sure about the assumption that there are no consequences for making mistakes.  What makes you think there won't be some compensation due from the administrator to the scheme?  People on here involved in pension administration may be able to say if there is insurance which covers these sort of errors (maybe the administrator just loses its no claims bonus?).   

And the individual who made the error is likely to face some come back (maybe just more training but it will be a black mark on their record).

xylophone

And the individual who made the error is likely to face some come back (maybe just more training but it will be a black mark on their record).

If the error was made fifteen years ago then the individual in question may long have gone to pastures new......

I have said it before and I will say it again, the administrators of pension schemes are (or are supposed to be) PROFESSiONALS.

Professionals should have (in my opinion should be legally required to have) insurance against any  professional mistakes.

They are not expected to be omniscient or totally proof against error - insurance protects them and their clients from the results 

of any mistakes.

There may well be members of pension schemes who have the knowledge of every nuance of the rules and the capacity to 

check the (often complex) calculations.

I suspect that such people are in the minority.

Lay persons should not have to suffer from the mistakes of those who are paid to offer them their professional services.