Overpayment caused by late implementation of Pension Sharing Order – The case study of Mr Y
Mr Y was a member of the Police Pension Scheme. His pension was overpaid by Devon and Cornwall Police because of the late implementation of a Pension Sharing Order (PSO). Mr Y complained to TPO about the recovery of the overpayment.
The PSO entitled Mr Y’s ex-wife to a 41.28% share of his pension benefits. The PSO was sent to the scheme administrators on 4 June 2013 and Mr Y paid his half of the administration fee.
Mr Y continued to receive his full pension. He queried this and was told it was because his wife had not paid her half of the administration fee. Mr Y continued to receive his full pension until December 2017.
Under Regulation 7 of the Pensions on Divorce etc. (Charging) Regulations 2000 (the Charging Regulations), the PSO implementation can be postponed if there is an outstanding charge. Therefore, the initial decision not to implement Mr Y’s PSO, until the administration fee had been paid, was provided for in legislation.
However, Regulation 9 of the Charging Regulations allows other methods for the pension scheme to recover charges, including making a deduction from the pension credit. This is what the administrators eventually did but their failure to do so much earlier was found to be maladministration.
With regard to the overpayment, the Ombudsman found a change of position defence or estoppel was not applicable. Mr Y said he was told in a telephone call there would be no backdating of the overpayments, but there was no evidence of this. The correspondence only referred to the “implementation” of the PSO being delayed, not the effect.
However, it was found that the Limitation Act 1980 prevented full recovery of the overpayments and overpayments made before 15 October 2013 could not be recovered.
The complaint was upheld. The scheme was told to recalculate the overpayment and agree an appropriate repayment plan. Mr Y was awarded £2,000 for severe non-financial injustice.
Related determinations
Related case studies
Overpayment – The case study of Mrs E
Mrs E was a member of the Teachers’ Pension Scheme (the Scheme) and she complained that Teachers’ Pensions (TP) were attempting to recover an overpayment of £13,506.15 from her.
Post retirement increases – The case study of Mr P
This complaint concerns the annual increases that have been applied to Mr P’s pension.