The recent Court of Appeal decision in CMG v CGI confirmed that The Pensions Ombudsman (TPO) is not a ‘competent court’ for the purposes of section 91(6) of the Pensions Act 1995.

This means that a County Court order is required before trustees can enforce a determination by TPO to recover a disputed overpayment from a scheme member.

This is likely to mean delays and an increased administrative burden and costs, making any recoupment process potentially disproportionate to the sums to be recovered.

Since the judgment, TPO has published a determination in Mr E, which relates to an overpayment of £90,934 built up over 24 years.

The trustees aimed to recoup the overpayment from Mr E’s future pension payments.

However, TPO restricted recoupment to overpayments made only after August 2019 (totalling £6,554).

The determination is a good lesson in all of the defences to claims for recovery of overpayments, even those not raised by the member.

It also serves as a warning for trustees who do not act promptly when discovering an overpayment.

The Mr E determination is likely to represent TPO’s approach to defences in the future.

The combined effect of the CMG decision and Mr E could make trustees reconsider their approach to recovering overpayments: Perhaps with an increase to de minimis levels before seeking recoupment (where permitted) and adoption of a more detailed approach to considering potential defences.

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