“Apologies for any inconvenience”

Juno_Moneta

It’s hard not to feel sorry for Derek. At his age this is probably quite hard to come back from, and also a rotten thing to happen just before Xmas. 

I know the public purse has a duty to recover overpayments, but I wonder if the same thing would have happened with a private sector employer. 

https://www.theguardian.com/money/2025/dec/06/retired-uk-civil-servant-ordered-to-pay-back-25000-after-pension-scheme-error

El_Torro

Suddenly being informed that your pension payments will be reduced by almost 30% for the next 11 years does suck, yes. A lot of the time in situations like this people say that he should have realised he was being overpaid. Still, DB pensions are complicated enough as it is, it's understandable to just go with what the scheme administrators are saying. 

I'm not sure why you mention private sector employers. Legally they would have just as much right to recover the losses as the public sector does. DB pensions are not common in the private sector, though we often hear about employed people being overpaid, sometimes for years, and the employer insisting on a repayment plan when they discover the error. 

QrizB

Juno_Moneta said:

It’s hard not to feel sorry for Derek.

Agreed, I feel sorry for him.

Juno_Moneta said:

At his age this is probably quite hard to come back from

I'm not so sure about that part.

He's 62 and still working, albeit part-time at present. £25k is roughly one year of full-time employment at minimum wage. If he can increase his hours he should be able to square this before he reaches SPA.

Marcon

El_Torro said:

I'm not sure why you mention private sector employers. Legally they would have just as much right to recover the losses as the public sector does. DB pensions are not common in the private sector, 

Presumably OP asked about private sector employers because they didn't know what the position would be and wanted to know. DB pensions are still common in the private sector, albeit they are almost all closed to new entrants and (in very many cases) future accrual. Many have been bought out with insurance companies, so the position would be especially interesting where errors come to light - the more so if the former sponsoring employer is no longer in existence.

Juno_Moneta said:

It’s hard not to feel sorry for Derek. At his age this is probably quite hard to come back from, and also a rotten thing to happen just before Xmas. 

I know the public purse has a duty to recover overpayments, but I wonder if the same thing would have happened with a private sector employer. 

https://www.theguardian.com/money/2025/dec/06/retired-uk-civil-servant-ordered-to-pay-back-25000-after-pension-scheme-error

Assuming he really didn't know that he was being paid too much (the article says the overpayments rose from £200 a year to £4,000 - if that's a correct statement of the position, it is a little difficult to see how the recipient could genuinely believe all was well), time for Derek to start going through the scheme's IDRP. If he was threatened with legal action (again, we only have the reporter's take), it suggests he was frozen into inaction by the demand.

The Pensions Ombudsman would be the next step if IDRP doesn't bring about a resolution. The PO's starting point is that members must be paid the correct benefits https://www.pensions-ombudsman.org.uk/faq/question-14 but circumstances can alter cases eg https://www.pensions-ombudsman.org.uk/case-study/overpayment-case-study-mrs-e and https://www.pensions-ombudsman.org.uk/sites/default/files/decisions/PO-8506.pdf

hugheskevi

Whilst there is always going to be focus on the pension administrator, with most errors there are usually two different entities partially responsible, sometimes 3, or even 4:

(1) The employer - in recent years, public sector employers have routinely implemented pay awards late with retrospection. This shouldn't cause issues, but when dealing with around half a million employees, if something can go wrong it will go wrong and even if affects less than 1% of members, that is still thousands. It would be much better in pension terms to do everything on time and not need any backdating. Any manual intervention can then introduce errors of its own. There are also lots of little special arrangements, with employers funding this and that for certain members, or various different pensionable allowances - again, should be fine, but the more complicated and bespoke you make things, the more opportunity for error arises. Anything you do today will have consequences for about the next 80 years. Administrative simplicity is never a consideration in decision-making. This is one of the huge downsides of computerisation - back in the days of paper, systems had to be simple, but now any can, in theory, be programmed and delivered even if in practice it will lead to a much higher probability of error. In the case of the Civil Service, they had the same pension for decades, then introduced new schemes in 2002, 2007 and 2015. That quadruples the admin needed, as all the legacy schemes are still there for decades to come.

(2) Payrolls - most of these are outsourced, and deserve far more criticism as the root of most issues lies with the payroll data. Everything is automated now, and if the right data goes in and is complete, there should not be any error as everything just flows through an automatic system. But there is very little attention to detail in some cases, and rubbish in = rubbish out. What might start as a minor error/omission can compound into big errors.

(3) Administrator - they are the end of line, having to deal with pay and policy decisions by the employer that affect pension entitlement, and any problems with the data received from payrolls. But even if they carefully scrutinise the data received and return errors and warnings to the payroll about possibly incorrect data, they are in the hands of the payroll as to how diligently and promptly the payroll explores and resolves the errors and warnings.

(4) Members - whilst it is easy to say that the member should be able to expect their pension to be correct, the harsh truth of the matter is that the only one of the 4 entities on this list who cares about the pension is the member. All the others are just following processes, and whatever the issue they have seen it a hundred times.  Individual members should be scrutinising payslips, P60s, ABS, and any portal information to check that everything appears correct. Errors are easy to correct when promptly identified, but far more difficult years or even decades later. This is particularly the case where individuals take time out (cease and return to employment, or unpaid leave), change employer, or make any changes that affect pension, eg, go part-time. But the vast majority of members don't even know what section of the scheme they are in.

None of the above is to excuse shoddy pension administration, but issues are often much more complicated and deep rooted than acknowledged.

molerat

You missed (5) Unions - who usually want to argue every pay deal so delaying the implementation with the knock on effects.  My public sector pay rise was always straightforwardly implemented each April as there was no negotiation, what the review body decided was implemented.

hugheskevi

molerat said:

You missed (5) Unions - who usually want to argue every pay deal so delaying the implementation with the knock on effects.  My public sector pay rise was always straightforwardly implemented each April as there was no negotiation, what the review body decided was implemented.

It is a fair point, and unions are usually involved in arguing for special pension arrangements for specific parts of the workforce too (eg Prison Governors in 2015 being given 50/50 employer/member funded Enhanced Effective Pension Ages as part of pension change negotiations). 

af1963

Perhaps we need rules like those about backdated energy bills. setting a limit on how far back you can be billed.

The rest of the overpayment could be recovered from the pension administrators who made the mistake.

artyboy

Back to the point I've made in the past about the need for professional indemnity insurance here. 

How on earth can administrators (or any other party) get away with this sort of negligence, especially when the pension calculations are sufficiently opaque that the poor pensioner accepts them in good faith and makes long term life choices based on that expected income.

Scandalous IMO...

Marcon

artyboy said:

Back to the point I've made in the past about the need for professional indemnity insurance here. 

How on earth can administrators (or any other party) get away with this sort of negligence, especially when the pension calculations are sufficiently opaque that the poor pensioner accepts them in good faith and makes long term life choices based on that expected income.

Scandalous IMO...

PI cover for unjust enrichment? Never going to happen, because it's against public policy.