Overpayments: case 1
Mrs M took her pension from the scheme in 2001. It was £135 a month to start with and had risen to £179 by 2011.
Between 2001 and 2011 Mrs M worked for another company starting on about £11,000 a year, rising to £13,000.
In 2011, when she was 70, she retired completely. Her income was the pension from the scheme, a number of other small pensions and the State pension.
In 2012 the scheme’s administrator said that she had been overpaid by, in total, about £3,700. When she retired the pension should have been £109 a month, not £135 – rising to about £150 a month, not £179.
The administrator intended to recover the overpayment over 125 months (roughly the same length time as the overpayments had been made for) and to reduce her pension to the correct level of £150 a month.
We asked Mrs M for details of her income and expenditure over the time of the overpayments.
We decided that the law (the “Statute of Limitations”) did not allow the administrators to go back more than six years, so whatever else they could not require her to repay the overpayments made before 2006.
But we also decided that Mrs M could not have known that she was being overpaid, and that she had spent the money on a slightly better standard of living than she would otherwise have had. So she should not have to repay even the overpayments made after 2006.
However, we did not agree to Mrs M’s wish that her pension should stay at the wrong level in future. We thought that if she had known what the correct pension was she wouldn’t have done anything differently – in particular when she decided to retire in 2011.