Overpayment – The case study of Mrs S

Mrs S retired and took her benefits from the NHS Pension Scheme (the Scheme) in 2007. At the time, she emailed the respondent to question the figures she had received and asked for a new retirement calculation. The response she received was that the figures were correct and no new calculation was done.

Mrs S still had doubts and contacted the respondent in 2016 to question the benefits she was receiving. She was subsequently told that the pensionable pay used to calculate her benefits at retirement was incorrect and an overpayment of £108,109.60 had occurred.

As part of the complaint process, Mrs S raised the Limitation Act 1980 (the Act) as a defence against repayment. The respondent firstly rejected this defence on the basis that the first time the issue came to light was when Mrs S first raised it with them in 2016. When Mrs S provided evidence that she had first raised the issue in 2007, the respondent changed its rejection of the limitation defence on the basis that Mrs S should have known that the salary information provided prior to retirement was incorrect. It also argued that it was only due to Mrs S’ insistence in raising the query again nine years after the error occurred that had brought the overpayment to light.

Mrs S’ complaint was considered by an Adjudicator. The Adjudicator agreed with the argument that the Act applied. With reasonable due diligence, the respondent could have identified the error when Mrs S requested the recalculation in 2007. The Adjudicator said that if the expectation was that Mrs S ought to have been aware that the pensionable salary information was incorrect, then this also applied to the respondent when it was asked to recalculate her benefits in 2007.

The cut-off date for the purposes of the Act is six years prior to the receipt of the formal response from the respondent to TPO. The formal response was received on 11 June 2018 and therefore the Act prevented recovery of any of the overpayment prior to 11 June 2012. This reduced the overpayment to £34,753.17.

Both parties agreed with the Adjudicator’s Opinion.