High Court rules no limitation period on recovering pension overpayments 23 April 2018
The High Court has ruled that there is no statutory limitation period in which to recover pension overpayments under a defined benefit (DB) scheme, as long as this is by adjusting future payments.
Professional Pensions has reported that the recent centred around whether BIC UK Pension Scheme Trustees had effectively introduced annual increases to pensions via a meeting in 1991, and, if not, whether the payments could be recouped. However, reports PP: “…recovering such payments cannot be as simple as seeking determination by The Pensions Ombudsman (TPO), but that this determination would then need to be enforced by a County Court, the court ruled in Burgess and others v BIC UK. Through an executed deed to alter the scheme's rules in 1993, and a resolution passed by trustees recorded in minutes of a meeting in 1991, members became entitled to annual increases at the lower of 5% or the Retail Prices Index for the period between 6 April 1992 and 6 April 1997. While much of the judgment deals with the process taken to introduce the increases - which was deemed effective - Justice Arnold also confirmed that the six-year statutory limitation period on claims did not apply to equitable recoupment.
However, this process - one of "equitable self-help remedy" - must be conducted via an adjustment of benefits in the future, rather than a request to be repaid monies previously received by members.
Further, while "it would be the trustees' duty, and not inequitable, to seek to recover overpayments and thereby increase the assets available for the benefit of all the members", trustees should review this on an individual member basis, as it may be inequitable in some cases.
Trowers & Hamlins partner Martin McFall, whose firm acted for BIC, said the case was significant as it dealt with a number of complex pensions issues.”
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Variation of contracts - when silence = acceptance 24 April 2018
If an employee works without protest after a variation of contract is imposed, should acceptance be inferred?
Not necessarily, held the Court of Appeal in Abrahall v Nottingham City Council.
When Nottingham City Council sought to regularise a variety of pay systems, it implemented a single system with pay scales determined on a spinal column points basis. The Court of Appeal found the employees were contractually entitled to annual incremental pay progression. Soon after the new system was implemented, the council brought in a two-year pay freeze. Throughout that period, there was no industrial action (save for a consultative ballot) and no affected employee raised a grievance. When Nottingham proposed an extension of the freeze, the unions activated a collective grievance procedure and then brought these claims. Apart from deciding whether there was a contractual right to incremental pay progression, the key issue before the Court of Appeal was whether the employees should be taken to have accepted a variation of their contracts by working for two years under the pay freeze.
The Court of Appeal held that they should not, setting out a number of helpful principles on whether acceptance should be inferred, including:
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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