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Ombudsman issues overpayment recovery factsheet

The Pensions Ombudsman (PO) has issued a factsheet explaining the effect of the Court of Appeal’s decision in CMG Pension Trustees v CGI IT UK Ltd [2023] EWCA Civ 1258 on the recovery of overpayments to scheme members by making deductions from their future pension payments. That case decided that the PO is not a ‘competent court’ for the purposes of s.91(6) of the Pensions Act 1995, so that a PO determination is not sufficient to enable a scheme to recoup overpayments from a member’s pension, and a County Court order is also required.

 

The factsheet provides guidance on managing overpayment disputes, noting that if a dispute requires a formal determination from the PO, the determination will set out a schedule of the amount and rate of recoupment, and will be accompanied by a certified copy of the determination which should be sent to the County Court nearest the member, by way of an application pursuant to r.70.5 of the Civil Procedure Rules authorising the scheme to commence recovery in accordance with the schedule. The Court will deal with the matter on the papers as an administrative exercise, and will not revisit the merits of the dispute, as the PO’s determination is binding on the parties.

 

In terms of the future, the PO notes that the DWP intends, when possible, to introduce legislation to reverse the decision in CMG and enable recovery of overpayments on the strength of the PO’s determination without the need for a County Court order.

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