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UK pensions speedbrief: Webber v DfE: how far back can pension schemes recover overpayments?

  • United Kingdom
  • Pensions
  • Pensions - Defined benefit
  • Pensions - Defined contribution
  • Pensions disputes



The High Court’s recent decision in Webber v Department for Education potentially creates significant obstacles for pension schemes looking to recover past overpayments of pension made in error. If a court or the Pensions Ombudsman concludes that the trustees or managers of the scheme should reasonably have discovered the error at an earlier date than they in fact did, or if there is a protracted attempt to resolve the dispute through use of the scheme’s internal dispute resolution process (IDRP), the member may be able to resist the claim for full recovery on the basis that the applicable limitation period has expired.


Under section 5 of the Limitation Act 1980, a claim to repayment of money paid by mistake cannot be brought later than six years after the right to make that claim first arose (ie when the mistaken payment was made). However, under section 32 of that Act, that six-year limitation period will not start to run until the claimant discovers the mistake for the first time, or could (with reasonable diligence) have discovered it.

Key facts

Mr Webber was a member of the Teachers’ Pension Scheme (TPS) who took early retirement in 1997. He was subsequently re-employed as a full-time teacher from September 2001. The TPS contains abatement provisions, which operate to reduce a member’s pension in payment so as to ensure that where the member returns to employment as a teacher, the combined total of his salary and his pension is not more than his salary at date of retirement (adjusted for inflation).

Mr Webber notified TPS that he had resumed employment, and TPS subsequently confirmed to him that his earnings for the tax year 2001-2002 (covering the part of the year from September to 5 April) would not take him over the abatement threshold. However, unfortunately, TPS overlooked the fact that Mr Webber’s earnings for a full year would take him over the limit in 2002-2003, and in every tax year thereafter. As a result, Mr Webber continued to be paid his pension in full.

TPS spotted the error in November 2009, and wrote to Mr Webber to seek recovery of more than £36,000 of overpaid pension. Mr Webber raised a complaint through the scheme’s IDRP (in July 2010), followed by a complaint to the Pensions Ombudsman (in April 2011). The Deputy Pensions Ombudsman found against Mr Webber, who then appealed to the High Court twice (the matter having been remitted to the Deputy Pensions Ombudsman for reconsideration on the first appeal).

On the second appeal, Mr Webber raised the issue of limitation. The judge (Nugee J) upheld Mr Webber’s appeal on that issue, concluding that TPS could reasonably have identified in the 2002-3 tax year that Mr Webber’s pension would need to be abated. Therefore, the limitation period started to run from that year. However, despite expressing a provisional view on the question, Nugee J did not actually decide at what date the limitation period stopped running – the ‘cut-off date’. This date was highly significant, since TPS would only be able to recover overpayments made in the six-year period ending with the cut-off date.

Instead, the parties were invited to agree a cut-off date, but (perhaps unsurprisingly) failed to do so. The matter therefore came before the Pensions Ombudsman for a third time. The Ombudsman decided that the closest analogy to TPS “bringing a claim” (for the purposes of s.5) was when TPS wrote to Mr Webber in November 2009 informing him that his pension had been overpaid and that they required him to make repayment.

Mr Webber disagreed, and appealed to the High Court again. The Pensions Ombudsman was granted leave to intervene on the appeal, on the ground that the point of law under consideration was of wider public importance, since it was generally applicable to the Ombudsman’s investigation and determination of complaints.


On the appeal, a range of possible cut-off dates were considered, including:

  • the date of the letter in November 2009 by which TPS first notified Mr Webber that they were seeking repayment of his overpaid pension (as held by the Pensions Ombudsman and argued for by TPS); 
  • the date on which Mr Webber received that letter; 
  • the date on which the Pensions Ombudsman received Mr Webber’s complaint form (as provisionally concluded by Nugee J); 
  • the considerably later date on which the Pensions Ombudsman notified Mr Webber that he had accepted Mr Webber’s complaint for investigation (as argued for by Mr Webber).

It was also raised as a possibility that no cut-off date had occurred or could occur in a complaint of this kind, since the Ombudsman’s complaint processes did not involve TPS in making a legal claim to repayment at any stage.

The Deputy High Court judge who heard the appeal disagreed with all of the above possibilities. He concluded that the action by TPS which was most closely analogous to the issue of a claim form in court proceedings for recovery of monies was the date on which the Pensions Ombudsman received TPS’s reply to Mr Webber’s complaint, in which it was clear that they would be resisting that complaint.

This date – which was later than any of the other dates considered – was, in the judge’s view, the first date at which TPS put forward in the context of formal proceedings a claim demanding that Mr Webber make repayment. The letter in November 2009, although it also included a demand for repayment, would not have been sufficient to stop the limitation period running if Mr Webber had not brought a complaint to the Pensions Ombudsman: TPS would have needed to issue a claim form in the civil courts in order to stop the clock. Mr Webber ought not to be in any worse position simply because he chose to resist TPS’s call for repayment by means of an Ombudsman complaint.

The judge noted that the Pensions Ombudsman had clearly been concerned that trustees might (effectively) be penalised for following their IDRP in an attempt to resolve the dispute without legal proceedings, or that members might opt to delay bringing a complaint until the very last minute, in order to minimise the potential recovery against them. However, the judge was unmoved, commenting that trustees can protect themselves against such risks by issuing a claim form (which TPS had not done here), and that trustees who act diligently to identify errors and seek to recover overpayments promptly should be adequately protected by s.32 of the Limitation Act in any event.


Whilst the outcome of this case is clearly good news for Mr Webber, the wider prospect of trustees and managers rushing to issue protective claim forms in the civil courts as a precautionary measure seems to run counter to the policy intention behind both the requirement for schemes to operate an IDRP and the existence of the Pensions Ombudsman’s jurisdiction.

It seems highly unlikely that the affected member will view the outcome of any IDRP as unbiased where the trustees are at the same time issuing legal claims against him in respect of the overpayments which are the subject of his IDRP complaint. Similarly, as the Pensions Ombudsman pointed out, issue of proceedings in the civil courts will usually deprive the member of the opportunity to bring a complaint to the Ombudsman (except in respect of pure maladministration), and will leave him exposed to the risk of costs as well as the greater formality of court proceedings.

Unsurprisingly, therefore, the Pensions Ombudsman has already flagged that he will be “reviewing … processes and procedures for dealing with overpayment cases, together with existing legislative provisions with a view to considering whether any possible amendments are necessary”.

In the meantime, in overpayment cases where limitation issues could present problems, whether because the overpayments stretch back a number of years or because an IDRP is becoming protracted, trustees and managers may wish to review their own processes, with a view to (as a minimum) entering into some form of stand-still agreement with the member.