The Pensions Ombudsman is to be recognised as a Competent Court

The government has confirmed that the Pensions Ombudsman (TPO) will be recognised as a competent court for certain pension complaints, with provisions set out in clause 93 of the Pension Schemes Bill.

The proposed changes were trailed in the King’s Speech in July 2024 and were welcomed by TPO, stating that it should “make ending outstanding overpayment disputes easier for all those involved, allowing for much faster and less costly resolution.” 

Previous Position 

We have written previously here about the implications of the Court of Appeal’s decision in the CMG case and TPO’s response to the conclusion that it is not a competent court for the purposes of section 91(6) of the Pensions Act 1995.  The effect of the decision is that currently TPO’s determination alone is not sufficient to allow trustees to recoup pension overpayments where there is a dispute – an application currently needs to be made to the County Court for an order to enforce the recovery. This adds cost, delay, and complexity.

Proposed Changes and their effect

The Explanatory notes to the Pension Schemes Bill state that clause 93 “seeks to make explicit the original policy intention set in primary legislation, which was that a determination by the Pensions Ombudsman, when determining a dispute about the appropriate amount of a charge, lien or set off in the specified circumstances, would be treated as an order of a competent court.” It is also recognised that “the clause makes it clear that if at any point after a dispute has arisen the parties resolve the dispute, this ends the dispute and the charge, lien or set-off can be exercised accordingly.” 

The Explanatory notes further state that the changes will:

• Reduce the burden on County Courts; 
• Ensure faster and more cost-effective resolution of pension disputes; and
• Result in both pension schemes and their members benefitting from a more efficient and accessible means of resolving pension complaints.

The proposed changes close an enforcement gap and should therefore be welcome reform for all parties when they come into effect.

If you need any assistance with an overpayments case or a member dispute, please do get in touch with Suzanne Padmore or your usual pensions team contact.

This article was written by Alex Bones, trainee solicitor and Andy Prater, Director, in the Burges Salmon Pensions and Lifetime Savings Team.