The issue of recovering overpaid pension contributions is often a minefield for trustees. However, a recent Deputy Pensions Ombudsman determination has shed some light on this area. The complainant, Mr Fitzgerald applied for early retirement in July 1997, and started receiving early retirement benefits from the Teachers' Pension Scheme (TPS) in September 1997. He was then re-employed for various lengths of time and with various employers until 2007. The early retirement form, and an information leaflet subsequently issued, both made it very clear that Mr Fitzgerald was obliged to notify the scheme's administrator if he began employment in education at any time during his retirement, that this could result in a reduction to his pension, and that he would be required to repay any overpayments.
The Deputy Pensions Ombudsman acknowledged that TPS's systems had been lax, with the result that Mr Fitzgerald did not always receive the necessary paperwork. However, Mt Fitzgerald should have chased for certificates of re-employment, and could not reasonably argue that simply because he did not receive certificates of re-employment from TPS, he should continue to benefit from an unabated pension plus his salary.
The determination concluded that it was Mr Fitzgerald's failure to return certificates of re-employment annually, despite his having agreed to do so, that caused him to be in a position where he needed to repay the overpayments of £70,000. However, TPS's poor administration had caused Mr Fitzgerald distress and inconvenience, for which they should pay him £200.
The TPS was directed to come to an arrangement for repayment that does not cause Mr Fitzgerald any undue hardship, i.e. complete a means assessment, and agree a reasonable period of time for repayment, which would typically be the same period in which the unabated period was received - 10 years in this case. This case follows the general legal view that no undue hardship should fall on the Member, and, where it is clear to a member that they are being unjustly enriched, they cannot benefit simply because the administrator fails to notice.
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