Teachers Pensions Scheme · CAS-13504-S4M0

CAS-13504-S4M0

Ombudsman’s Determination Applicant Mrs S

Scheme Teachers' Pensions Scheme (the Scheme)

Respondent Teachers' Pensions (TP)

Complaint Summary

Summary of the Ombudsman’s Determination and reasons

1 Relevant sections of the 2010 Regulations are set out in Appendix 1. 1 CAS-13504-S4M0 Detailed Determination Material facts

The Scheme is a statutory scheme bound by the 2010 Regulations (as amended). TP administers the Scheme on behalf of the Department for Education (DfE).

Dorset LA, Mrs S’ former employer, provided TP with service and salary information in respect of Mrs S for the purpose of the Secretary of State’s functions under the 2010 Regulations.

On 25 May 2016, TP received Mrs S’ application to claim her deferred benefits from 4 July 2016.

On 22 June 2016, TP emailed Dorset LA and provided details of the salary information it held for Mrs S. TP asked Dorset LA to confirm whether the information was correct, as Mrs S’ full time equivalent annual salaries appeared to fluctuate.2

On 28 June 2016, TP wrote to Mrs S and advised:

“Please note we have identified possible missing service on your record for

DORSET 01/09/09 to 31/03/10

Despite several attempts, we have been unable to obtain the service from your relevant employer.

You may wish to contact the relevant employer directly and ask them to submit the service.

Please do not contact Teachers Pensions directly as any service must be provided by your relevant employer.

Any retirement benefits that become due for payment will be calculated without this service.”

Mrs S’ retirement benefits were subsequently put into payment with effect from 4 July 2016.

On 26 July 2016, Dorset LA provided updated salary information to TP for the period requested. It asked TP to contact Dorset LA if it required further information.

On 9 August 2016, TP wrote to Dorset LA to query the revised salary information it had provided in respect of the periods 1 April 2010 to 31 October 2010 and 1 June 2011 to 31 March 2012. TP said:

“Both these periods are quite random updates and you now confirm that teacher did not work and worked a little part-time but originally she was full-

2 In the email, TP provided details of the salary information it held for Mrs S in respect of the period 1 April 2009 and 31 March 2013. 2 CAS-13504-S4M0 time. This has decreased the service and an overpayment of benefits will be calculated. Please could you re-check the whole period 01.04.2009 to 31.03.2013 and confirm whether she was in full-time employment or part-time and if part-time, please supply details of the full-time salary and part-time salary paid [sic].”

3 These periods are detailed in Appendix 2. 3 CAS-13504-S4M0

On 5 June 2018, TP replied to Mrs S’ complaint. The response is summarised below:-

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4 TP provided a breakdown of Mrs S’ amended service and salary information. 5 CAS-13504-S4M0

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5 Details of the calculation provided by TP is set out in Appendix 3. 7 CAS-13504-S4M0

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6 TP’s findings on Mrs S’ hardship claim is detailed in Appendix 4. 9 CAS-13504-S4M0

7 Mrs S has provided The Pensions Ombudsman (TPO) with documentary evidence that she spent £1,129.09 on purchases for her bathroom in early 2017. Mrs S has explained that she paid the plumber who fitted the bathroom over £2,000 for his workmanship but she does not have a receipt to evidence this. 10 CAS-13504-S4M0

8 Mrs S provided TPO with copies of her bank statements and has highlighted the payments she made towards her daughter’s wedding. The bank statements evidence that Mrs S spent £816.85 on her daughter’s wedding, which was in June 2017. 9 The evidence Mrs S has provided to TPO shows that she made an initial payment of £307 towards the Funeral Plan. The remaining balance was paid off in 12 monthly instalments of £281.75 commencing in November 2016.

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Conclusions

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10 Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548 11 See Chapter 27.1 of Goff & Jones, The Law of Unjust Enrichment for a detailed review of the case law. 12 Philip Collins Ltd v Davis [2000] 3 All ER 808. A case where two itinerant musicians with a “relaxed and philosophical propensity to overspend their income escaped liability to the extent that increases in their everyday outgoings were referable to their receipts from the claimant.”

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I note TP’s comments concerning the fact that Mrs S had received a series of EORBS that showed her pensionable service had increased by a full year each year, although she was working part-time.

Mrs S says she does not recall studying the EORBs closely at the time. As she is not familiar with how pension benefits are calculated, she assumed the figures were correct. It could be argued that it was negligent of Mrs S not to have studied in detail the EORBs she received prior to her retirement. As stated in paragraph 44 above, her failure to do so would not prevent the good faith defence being available to her.

13 National Westminster Bank plc v Somer UK Limited [2002] 14 Niru Battery Manufacturing Co v Milestone Trading Ltd (No 1) [2002] EWHC at 135].

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Other possible legal defences to recovery of an overpayment

“When it comes to estoppel by representation or promissory estoppel, it seems to me very unlikely that a claimant would be able to satisfy the test of unconscionability unless he could also satisfy the three classic requirements. They are (a) a clear representation or promise made by the defendant upon which it is reasonably foreseeable that the claimant will act, (b) an act on the

15 1 April 2016 to 28 June 2016. 17 CAS-13504-S4M0 part of the claimant which was reasonably taken in reliance upon the representation or promise, and (c) after the act has been taken, the claimant being able to show that he will suffer detriment if the defendant is not held to the representation or promise. Even this formulation is relatively broad brush, and it should be emphasised that there are many qualifications or refinements which can be made to it.”

“… the principles applicable to the assertion of an estoppel by convention arising out of non-contractual dealings … are as follows:

i) It is not enough that the common assumptions upon which the estoppel is based is merely understood by the parties in the same way. It must be expressly shared between them.

ii) The expression of the common assumption by the party alleged to be estopped must be such that he may properly be said to have assumed some element of responsibility for it, in the sense of conveying to the other party an understanding that he expected the other party to rely upon it.

iii) The person alleging the estoppel must in fact have relied upon the common assumption, to a sufficient extent, rather than merely upon his own independent view of the matter.

iv) That reliance must have occurred in connection with some subsequent mutual dealing between the parties.

v) Some detriment must thereby have been suffered by the person alleging the estoppel, or benefit thereby have been conferred upon the person alleged to be estopped, sufficient to make it unjust or unconscionable for the latter to assert the true legal (or factual) position.”

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I have also considered whether Mrs S has sustained any non-financial injustice as a consequence of maladministration on the part of TP.

I have no doubt that this matter has caused Mrs S considerable distress. TP notifying her that there had been an overpayment, and that it was seeking to recover it, would likely have come as an unpleasant shock. However, this does not by itself, amount to maladministration.

I note that TP has considered Mrs S’ claim for the overpayment to be waived on the grounds of hardship, and that it has not sought to recover the overpayment while the matter is being investigated by TPO. As a matter of law, TP is able to recover the balance of the overpayment under the principles of unjust enrichment (a private law right) and also under Regulation 114 of the 2010 Regulations, which gives TP a discretion to recover overpayments. TP’s discretion under Regulation 114 extends to both the amount to be recovered, if any, and the period of recovery.

“In principle public sector organisations should always pursue recovery of overpayments, irrespective of how they came to be made. In practice, however, there will be both practical and legal limits to how cases should be handled. So each case should be dealt with on its merits.”

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Non-financial injustice

Directions

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Dominic Harris

Pensions Ombudsman 20 February 2024

21 CAS-13504-S4M0 Appendix 1

“Cessation, etc. of benefits where no entitlement

114. – (1) This regulation applies where after paying a benefit the Secretary of Sate determines that there was no entitlement to the benefit or there is no longer an entitlement to the benefit.

(2) The Secretary of State may-

(a) cease to pay the benefit;

(b) withhold the whole or any part of the benefit;

(c) in the case of a payment made when there was no entitlement to the benefit recover any such payment.”

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• 01/04/2009 to 31/08/2010 £240,480

• 02/09/2009 to 31/10/2010 £251,680

• 01/11/2010 to 31/05/2011 £316,250

• 01/04/2012 to 31/03/2015 £251,680

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Regulation 43 states that where during a financial year a person has spent one or more periods in part-time pensionable employment for the purpose of calculating reckonable service attributable to any period of such employment, each of these periods counts as 365 x CS/FTCS day of reckonable service, where –

CS is the person’s contributable salary for the period, and

FTCS is what the contributable salary for the whole financial year would have been and had continued throughout the year.

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After considering Mrs S’ financial circumstances, based on the three-month bank statements Mrs S had provided to TP, there seemed to be a floating balance of £1,500 at the end of every month. So, TP asked if there was scope for Mrs S to repay £100 a month.

TP appreciated that the bank statements may not have been a true reflection of Mrs S’ finances. If that were the case, it would consider putting in place, a small monthly repayment plan until Mrs S reached State Pension age.

TP appreciated that Mrs S’ health had deteriorated and that this could have an impact on her future income. It informed Mrs S that she could consider placing a charge on her property. The charge would not have compelled Mrs S to sell the property, it would have been a way for the DfE to safeguard the debt.

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