If you have been underpaid in your Pension and the Pension Authority is repaying you the monies owed, you are entitled to interest payable on said repayment. If the Pension Authority do not include interest as part of the repayment to you, you should immediately request that interest is paid on the amount. If that request is refused you should make a complaint via the Internal Dispute Resolution Procedure [IDRP] with a view to making a complaint to the Pensions Ombudsman.
The payment of interest on arrears owed is well established both by the Courts and The Pensions Ombudsman and you should cite the below cases to reinforce your argument.
REGINA v Phillip Sean TULLY [before His Honour Judge Morris] Cardiff Crown November 2006
This case was in relation to an appeal against the refusal of North Wales Police Authority to admit his claim for payment of a deferred pension entitlement for the period 1st October 2001 to 31st Marrch 2005 under the Police pension Regulations 1987. The Court ruled in Mr Tully’s favour and in addressing the issue of back payment and interest on that back payment, the Court concluded at Paragraph 31:
- We are asked to consider the application of interest to the back payments following such judgement. As to that, we have received no argument from counsel who conducted the appeal. In principle, we consider that the appellant is entitled to interest but at what rate, over what particular period is not, it seems, for us now to decide. We were told at the conclusion of argument that counsel would confer with each other with a view to reaching agreement upon outstanding amounts upon both case scenarios, namely upon the basis that the appellant won or on the basis that the respondent won. We do not know whether that has been applied to interest but can only hope that it has. Thus we are not prepared to go any further than to state that, in principle, we consider that interest is recoverable.
There have also been many cases of Pension disputes determined by the Pensions Ombudsman in which the Ombudsman has odered that back payments be paid to the applicant, with simple interest added to the back payment; as an example in the case of HENDERSON the Ombudsman determined at Paragraph 27:
I now direct that, within 21 days of the date of this determination, NYPA shall refer Mr Henderson’s case back to the PMAB for review and make it clear to the PMAB what it is to consider. NYPA shall restore Mr Henderson’s injury benefit to its previous rate until such time as a final decision is reached. Any arrears shall be paid to Mr Henderson with simple interest at the rates for the time being quoted by the reference banks. NYPA shall provide Mr Henderson with a copy of its calculation of any arrears and the interest thereon.
A further example is the Ombudsman’s Determination in the case of Mrs N and Gwent Police in which the Ombudsman determined at Paragraphs 11 – 16:
- Gwent Police say they have no intention of paying interest on the repayments of deducted ESA on the grounds that:
- the Police (Injury Benefit) Regulations 2006 do not mention the requirement to pay interest on amounts due; and
- the payment of interest is not mentioned the Home Office’s letter to NARPO of 10 June 2016.
- Neither argument prevents me from awarding interest.
- The incorrect deduction of ESA from Mrs N’s Injury Pension has denied Mrs N income that she would otherwise had available to use. My view is that interest should be paid by Gwent Police on the repayment sum as directed below.
- Therefore, I uphold Mrs N’s complaint.
Directions
- In the August payroll Gwent Police will cease the deduction of ESA from Mrs N’s Injury Pension.
- In the September payroll Gwent Police will pay Mrs N the total amount of ESA deducted from her Injury Pension, plus simple interest at the rate for the time being declared by the reference banks from the date each deduction was made to the date of payment to Mrs N.
Anthony Arter Pensions Ombudsman 3 August 2016