When trustees discover that they have made overpayments to one or more members, they have a duty to recover the overpaid amounts for the benefit of the trust. However, it can be difficult to seek repayment from pensioners, who are by definition the older members of the scheme. Therefore, trustees frequently prefer another solution such as reducing future payments to recoup the past overpayment.
The Pensions Act 1995 provides that, if a member disputes a proposed recoupment, the trustees require an order from a “competent court” to enable them to enforce the recoupment. In the case of CMG Pension Trustees Limited v CGI IT UK Limited, the High Court ruled that the Pensions Ombudsman is not a “competent court” for this purpose. Therefore, as things stand, trustees would have to apply to a county court to enforce any recoupment. However, the Ombudsman has been given leave to appeal.