Question 14
My pension provider has been paying my benefits, but they contacted me to tell me that they have been paying me too much and they need to recover the overpayment. Are they allowed to recover the overpayment as it is their mistake?
Your pension provider can only pay you the benefits that you are entitled to under the rules of the pension scheme, and the provider has a duty to try to recover the overpayment.
If you believed the benefits you were being paid were correct and spent money or made financial decisions on the basis of receiving that level of benefits, which you would not have made otherwise, you may have grounds to argue that you should not have to repay some or all of the money that has already been paid to you.
However, you must be able to show that you changed your financial position based on the amounts paid to you, or that the pension provider made a clear statement that you relied on. It is also very important to be able to show that any change you made to your financial position or reliance on statements was reasonable.
If you have been made aware by your pension provider that they have been overpaying your benefits, you should also take any steps you can to reduce your financial loss. For example, if you had booked a holiday which you would not have booked if you knew that you were receiving the overpayments, and it is possible to cancel it, you should do so.
If the overpayments have been made to you for a long time, there might be some of the money the provider cannot recover because too much time has passed, but this will depend on the exact circumstances of the overpayments.
If you think you should not have to repay the overpayments, or that a repayment plan proposed by your pension provider will put you in financial hardship, you should raise this with your pension provider. If you are unsatisfied with their response, please complete our application and send us all relevant paperwork.
Related questions
We cannot decide on your eligibility for an ill health pension, but we can look at how a decision about an ill health pension was made and if it was made by the right decision maker.
We would look at whether the right decision-maker has:
- Followed the scheme’s rules correctly;
- Asked the right questions; and
- Only taken into account relevant evidence and ignored irrelevant evidence.
If we decide that the decision-maker has not reached its decision properly, we can direct them to revisit their decision and make it again. However, we cannot prevent them from reaching the same decision as long as it is made properly.
Contributions deducted from your pay must be paid to the scheme by the 22nd of the following month (if paid electronically) or by the 19th of the following month in any other case.
If this has not happened, you should first raise this with your employer and give them the chance to put things right. To find out more, please see our ‘Complaining to the party/parties at fault’ factsheet.
If you are unhappy with their response or remain dissatisfied please submit a completed application to us along with relevant paperwork and supporting documents.
More information can be found in our ‘Workplace pensions – unpaid pension contributions’ factsheet.