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Complaint Topic: Overpayments
Outcome: Resolved by Early Resolution
Type: Pension complaint or dispute

Mrs E contacted us after receiving a demand for the repayment of pensions amounting to around £123,000 paid to her late husband. These payments were made in error because Mrs E’s husband had previously transferred from the scheme, but the scheme had failed to update its records.

Before contacting us, Mrs E had complained to the scheme. As a result of her complaint, they agreed to reduce the overpayment they were asking her to repay, to £45,000, equivalent to the last six years of pension payments.

We explained to Mrs E that the scheme was legally entitled to seek recovery of the overpayment. We also explained there were potentially some defences against recovery. One of those possible defences was the Limitation Act 1980. This could potentially mean the scheme could not recover any payments made more than six years ago if they could, with reasonable diligence, have identified they were paying the pension in error. The scheme had however already taken this into account by agreeing to reduce the overpayment they were seeking to recover.

A defence could also be made against some, or all, of the demand if the recipient had reasonably relied on the incorrect payments to spend monies or make financial decisions they would not have done otherwise. We gave our honest view that we thought it unlikely this defence could succeed as it was reasonable to have expected Mr E to have known he was not due this pension.

Mrs E considered our comments and opinion on her complaint. She explained she was presently able to offer a payment of £20,000 and asked if we would present this to the scheme. The trustees subsequently advised they were prepared to accept this payment as settlement of the overpayment made to the late Mr E.  

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