HPS2 Trustee Response Regarding Overpayment Recovery

  HPS2 Trustee Response Regarding Overpayment Recovery

The key points from the HPS2 Trustee's explanation of their policy regarding recovery of overpaid pensions are, with HPA comments added in red:

• They have a legal duty to do this but can use discretion. They claim they have been sensitive to the situation. HPA’s comment – However no evidence has been provided to support the Trustees’ statement that they have been sensitive to the situation. HPA is not aware of any member who has benefitted from discretion and knowing the context of the overpayment claims we cannot imagine a situation where discretion has been exercised. It is a fact that other companies and public bodies have overpayment policies (for example, this) that seek to minimise the effect on individuals by allowing the Trustee to accept an individual’s case that they acted in good faith (thus avoiding the individual having to prove their case).
• The Trustee must consider a balanced position on behalf of the full membership. HPA’s comment – The amounts of overpayment that we know of would have made little difference to the Scheme’s financial position, but discretion would have made a significant difference to the individual member’s financial position and state of mind at a difficult time.
• They quote using discretion to limit repayments to a maximum of six years. HPA’s comment - The maximum of six years is a legal requirement, as set out in the case of Webber v Dept of Education, it is nothing to do with discretion. There is a later case that differs but the judgement has no legal standing according to this.
• They are following common industry practice. HPA’s comment – we find it very surprising that in an industry well known for a checking ethos that this issue could have occurred.
• One of the issues with the current legal situation in these circumstances is that it is up to the individual to prove financial hardship if they wish to challenge the Trustee decision, not for the Trustee to explain their decision. HPA’s comment - it is the Trustee’s duty to explain how their mistake occurred and that the Trustee has the moral duty discretion to standby their mistake particularly when it involves a retired member who is unable to recover from this financial hardship.