Q & A for pensioners in respect of GMPs and the overpayment of pensions
16 July 2009
Teachers’ Pensions approached HMRC, on behalf of the DfE, to check some additional cases where it was suspected that there may be overpayments of pension. It has been confirmed that there are a further number of GMP notifications in addition to those that were previously requested. The result is that there are further pensioners in the TPS who have been receiving overpaid pension. We have written to these members accordingly.
Back to AnnouncementsQ. What’s this I hear about further overpayments?
A. We have received the results of additional data checks requested from HMRC affecting another group of TPS pensioners. The problem has happened due to incorrect increases being made to their pensions. We have written to these pensioners to explain what has happened and what action we are taking as a result.
Back to the topQ. How have these further cases arisen?
A. Following a request from TPS for some additional cases to be checked, HMRC identified GMP notifications for a further batch of pensioners within the TPS. This new data means that for those TPS Pensioners we now have a record of the part of the pension (the GMP) on which increases are paid either in part or in full with state pension, and we have assessed whether this part of the pension has been increased twice – once with the state pension and once with the occupational pension (TPS).
Back to the topQ. What is happening to ensure there will not be further problems in the future?
A. As announced in the House of Commons on 16th December, the Government commissioned the National Audit Office (NAO) to undertake a formal review of overpayments to public service pensioners. NAO published their review on 16 July. The Department for Education welcomes the report and will actively work with other public sector Pension Schemes and HMRC to implement the recommendations.
Back to the topQ. How did the mistake happen?
A. The problem stems from the fact that part of the pension has been increased twice – once with the state pension and once with the occupational (TPS) pension. This has happened because the TPS did not have a record of the part of the pension (the GMP) on which increases are paid either in part or in full with state pension. Further notes explaining the issue are available here.
Back to the topQ. How will I know if I’m affected?
A. We have written to all those who have been overpaid.
Back to the topQ. What is going to happen now?
A. The manager of the TPS, the Department for Education (DfE) has, exceptionally, agreed not to ask affected pensioners to repay the overpayments. You need not worry, therefore, about having to pay money back.
However, if you have been overpaid, we will have to correct your pension and we will make the adjustment to your pension during August. We are doing it at this time to give you the maximum advance warning that we can so that you have time to plan for the reduction.
Back to the topQ. Will I have to repay any of the money I have already received?
A. No. The DfE has agreed not to ask you to pay back the overpayment.
Back to the topQ. Will there definitely be a change to my pension in future?
A. Yes. If you have been overpaid we will have to adjust your pension to the correct level. We will do this in August 2009. We are making the adjustment then to give you time to plan for the reduction.
Back to the topQ. Am I worse off that those who have already had adjustments?
A. No. We are treating you in exactly the same way as those who already have had adjustments.
Back to the topQ. I have been getting my pension for many years. How can you reduce it now?
A. The TPS pension arrangements are covered by statute and I am afraid we have no discretion to pay a pension different to that which the scheme rules allow. Where we are aware that we are paying the incorrect rate of pension, we have a duty to adjust the pension to the correct level.
Back to the topQ. Why has this problem only affected the Teachers' Pension Scheme?
A. This problem is not unique to the TPS. Other public sector schemes have a similar problem.
Back to the topQ. What do I do if I want to complain?
A. All occupational pension schemes have an internal dispute resolution procedure. This is a two stage written procedure. At the first stage you should write to us setting out your complaint and we will respond. If you remain dissatisfied at the second stage of the procedures you can ask the DfE as scheme managers to look at your complaint. Information about the procedure can be found here.
Back to the topQ. Will pensioners who have been overpaid be required to declare this as an unauthorised payment and be subject to additional tax as a result?
A. No. these overpayments will have been taxed in the same way as any other pension income and there will be no further tax liability.
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