UK's TPO partially upholds complaint against Teachers' Pensions and Islington Council

The UK's Pensions Ombudsman (TPO) has partially upheld an overpayment complaint against Teachers' Pensions (TP) and Islington Borough Council, after finding that delays and lack of communication had caused serious distress and inconvenience.

As reported by our sister title, Pensions Age, TP has been ordered to pay ‘Mr E’ £1,000 in recognition of the serious distress and inconvenience caused, whilst Islington Borough Council has been ordered to pay £500 for its failure to respond to the complaint.

TPO also noted that the council has still not provided any further explanation as to its lack of response to the ombudsman's office despite "numerous requests", highlighting this as "disappointing".

Mr E raised his complaint after objecting to TP's effort to return overpaid pension funds, stating that there was no reason to doubt the figures provided to him at retirement were correct, and that he would not have retired at that point if he had known the correct position.

TP alerted Mr E, who retired in 2014, to the error in 2018, explaining that an adjustment in salary figures used to calculate his pension benefits had resulted in an overpayment of £13,337.17.

However, TPO's decision stated that whilst the council initially provided the incorrect information, it had rectified this by providing the information prior to the benefits coming into payment.

Instead, the ombudsman found that it was the schemes failure to act on this information, and subsequent continued failure to realise the error for four years, that caused the current situation.

As a result, the ombudsman increased the award for distress from the TP’s original offer of £500 to £1000, in recognition of the delay.

However, TPO has also confirmed that Mr E’s pension entitlement is a statutory debt owed to him by the scheme and is liable to be offset against the overpayment.

As such, it confirmed that it is inequitable for Mr E to insist on his full entitlement without allowing the claim for the overpayment to be satisfied, and that TP can rely on equitable set-off basis for the recovery.

Furthermore, TPO also clarified that Mr E cannot rely on the limitation period under section 5 of the Limitation Act as a defence, or a change of position defence.

In his decision, the pension ombudsman, Anthony Arter, explained that the change of position defence was not viable as Mr E had the requisite knowledge to understand and question the salary figure intrinsic to the calculation of his benefits.

He also confirmed that the confirmation of acceptance of his pension entitlement in 2014 did not represent contract between Mr E and the scheme.

Adding to this, Arter found that there was no evidence as to why Mr E wanted the specific pension he was paid in 2014, stating that the lesser adjusted amount he was notified of in 2018 was “not significant” and would not have affected his overall choice to retire in 2014.

Arter also stated that whilst he could understand Mr E's viewpoint in relation to issues such as the lack of a specific case officer to correspond with, there was no “identifiable maladministration” specifically caused by this.

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