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Blog

The implications of the CMG case on rectifying errors in pension matters

Giorgia Carpagnano December 5, 2023

In a recent decision (The Pensions Ombudsman v CMG Pension Trustees), the Court of Appeal has confirmed that obtaining a court order is necessary for the recoupment of overpaid pensions from members. The court clarified that relying solely on a determination by the Pensions Ombudsman is insufficient to recover a disputed sum.

Background

In 2022, the High Court, in the Pensions Ombudsman v CMG Pension Trustees, examined the trustees' authority to recoup overpaid benefits, focusing on reductions in future pension payments. Section 91 of the Pensions Act 1995 (PA95) governs set-off against pension benefits and allows trustees to recoup overpayments under specific conditions. These include (i) ensuring that deductions do not surpass the monetary obligation, (ii) providing the individual with a certificate outlining the owed amount and its impact on benefits, and (iii) in case of a dispute, waiting until the obligation is enforceable under a court order.

Summary

The court clarified that when recouping via future benefit reductions, a court declaration is sufficient, with no need for a payment order. The Court of Appeal later determined that the Pensions Ombudsman is not a competent court in this context. To enforce the Ombudsman's decision, trustees should deliver a certified copy to the County Court, which will then enforce it administratively, avoiding a rehearing of the case.

Additionally, the court addressed the interpretation of "competent court" rejecting the notion that the Pensions Ombudsman qualifies as a competent court. The court emphasised that the Pensions Ombudsman's role is distinct from a court, and his jurisdiction is one-sided, requiring a member to initiate the process.

Conclusion

Ultimately, the court dismissed the appeal, upholding the requirement for a court order from a competent court, such as the County Court and not the Pensions Ombudsman, to enforce recoupment after a dispute has been considered and determined by the Pensions Ombudsman.

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