Overpayment – The case study of Mr F
Mr F sought help after being told by his pension scheme (the Scheme) that he was not entitled to the pension that he had been paid since 2006. Mr F had, in fact, transferred his entitlement away from the Scheme 12 years earlier. Mr F did not dispute that he had transferred out of the Scheme, but he believed that the pension paid to him was in respect of his second period of service, having re-joined the employer a year after leaving.
The overpayment was the result of an error which meant that Mr F’s earlier service had not been correctly marked to show that he had transferred. Mr F had been overpaid approximately £138,000.
Our Adviser explained to Mr F that, legally, the Scheme was entitled to seek recovery of the overpayment. However, our Adviser considered that there might have been grounds to suggest that, by virtue of the Limitation Act 1980, monies paid more than six years beforehand might not be recoverable. Our Adviser also explained to Mr F that, if he were to challenge the recovery of the overpayment, he would need to persuade the Scheme on balance that: it had been reasonable for him to consider that the monies he had received were correct; and, as a result, he had relied on the overpayments to make expenditure that he would not otherwise have made.
Mr F explained why he had believed the figures quoted to him in 2006 were correct and how he had then used the monies to make expenditure and live a lifestyle that he had thought he could afford. Our Adviser relayed this to the Scheme’s trustees for them to consider.
After reviewing Mr F’s explanation and circumstances, the trustees decided not to seek repayment.
Related case studies
Mr S was a member of Stanplan A, a Standard Life occupational pension scheme (the Scheme).
The case involved complaints made by members and the current trustee of the pension schemes, Dalriada Trustees Limited (Dalriada).