TPO releases new information to help members understand overpayments

The Pensions Ombudsman (TPO) has developed information to help members (or other beneficiaries) of pension schemes understand the key issues that arise when a pension has been overpaid. Reflecting our independent role in the dispute resolution process, it is designed to be factual and neutral – and allow disputes to be resolved the earliest possible stage. We would like schemes to share this information with a member, ideally when informing them of an overpayment, or when a member queries or challenges the scheme’s attempt to reclaim an overpayment, so that members have a better understanding of this complex area. 

Overpayments happen when a pension scheme pays too much money to a member. The general legal principle is that members are only entitled to their correct benefits under the scheme, so overpayments are usually recoverable, and ongoing pension payments are almost always reduced to the correct amount. However, it can be upsetting and confusing for members to be told this, particularly if the overpayments happened through no fault of their own. TPO receives many complaints on this topic that are often very complex to resolve.

The information is designed to help members understand

• What an overpayment is 

• What obligations exist around repaying money that was overpaid

• What potential legal defences exist for specific situations that may mean they do not have to repay the money

• The requirement to engage with the scheme and provide evidence to support any of those defences

• What to expect from the scheme when an overpayment occurs

• How and when TPO can help if a dispute cannot be resolved with the scheme

It is hoped the information supports both parties to work together to agree whether, how and over what period an overpayment should be recovered. In turn, this should allow the parties to resolve the issue without the need to come to TPO, and any complaints we do receive should be more straightforward to resolve.