TPO partly upholds complaint against BIC trustees following overpayment of benefits

The Pensions Ombudsman (TPO) has partly upheld a complaint against the trustees of the BIC UK Pension Scheme, after concluding that the complainants had a defence of laches to the recovery of the overpayments that had built up.

The dispute arose after the trustees sought to recoup overpayments totalling approximately £31,413 from Mr D’s pension and £16,408 from Mrs D’s pension, by deducting monthly amounts over a period exceeding two decades.

This followed the Court of Appeal’s decision in BIC v Burgess [2019], which reversed a prior High Court ruling on pension increases within the scheme.

In particular, the trustees wanted to recoup the sum of £31,413 from Mr D’s pension, at a monthly rate of £121.76, over 21 years and six months that the overpayment accrued. 

They were also seeking to recoup £16,408 from Mrs D’s pension, at a monthly rate of £62.62, over 21 years and 10 months that the overpayment accrued.

However, TPO ruled that that is not equitable for the trustees to recoup the overpayments that accrued before 1 April 2020.

The decision cited the defence of laches, noting that the trustees’ delayed recovery efforts meant it was unjust to pursue repayment of sums paid over many years.

Specifically, the trustees were ordered to refrain from taking any recovery action relating to the £30,870.64 overpaid to Mr D between 1 March 2000 and 31 March 2020 and the £16,095.10 overpaid to Mrs D between 1 October 1999 and 31 March 2020.

In addition, the trustees were ordered to pay Mr and Mrs D £1,000 each for the non-financial injustice as a consequence of the maladministration by the trustees in making the overpayments.

Mr and Mrs D were members of the BIC UK Pension Scheme and over the years the trustees paid them pension amounts that were higher than they should have been.

These overpayments built up from the late 1990s until 2020, amounting to tens of thousands of pounds.

The trustees sought to recover the overpayments made to Mr and Mrs D’s pension through deductions from their future pension payments, structured as a gradual monthly recoupment over more than 21 years, reflecting the length of time during which the overpayments had accrued.

Mr and Mrs D challenged this approach by complaining to the scheme’s internal dispute resolution procedure (IDRP) regarding the trustee’s decision to recoup the overpayments.

The trustees replied to Mr D under the IDRP, and Mrs D separately, saying that they did not consider they could reduce the rate of recovery they had proposed but the recoupment would be suspended until the TPO had reached a decision on their complaints.

Mr and Mrs D said they were informed in February 2013 separately that pension increases on a certain element of their pension would be frozen but did not state that they had been overpaid – they were not made aware of this until seven years later in 2020.

Additionally, Mr and Mrs D set out that any further reduction of their pension would cause them “considerable financial hardship” as they already could not afford household maintenance, holidays or upgrade their car.  

The trustees decided they could not amend the pension figures and on 2 May 2025 deputy pensions ombudsman, Camilla Barry, issued a joint preliminary decision partly upholding both complaints.

Barry said set out that within 28 days of the determination the trustees should award £1,000 to Mr and Mrs D each as well as £457.31 for Mr D and £686.66 to Mrs D in respect of the balance of their award.

She also ruled that the overpayments are not recoverable as they have “valid defences in law to the recovery of this part of the overpayments”.



Share Story:

Recent Stories


A changing DC market
In our latest Pensions Age video interview, Aon DC senior partner and head of DC consulting, Ben Roe, speaks to Laura Blows about the latest changes and challenges within the DC sector

Being retirement ready
Gavin Lewis, Head of UK and Ireland Institutional at BlackRock, talks to Francesca Fabrizi about the BlackRock 2024 UK Read on Retirement report, 'Ready or not. How are we feeling about retirement?’

Podcast: Who matters most in pensions?
In the latest Pensions Age podcast, Francesca Fabrizi speaks to Capita Pension Solutions global practice leader & chief revenue officer, Stuart Heatley, about who matters most in pensions and how to best meet their needs
Podcast: A look at asset-backed securities
Royal London Asset Management head of ABS, Jeremy Deacon, chats about asset-backed securities (ABS) in our latest Pensions Age podcast

Advertisement Advertisement