Teachers’ Pension Scheme faces high-profile ombudsman complaints

Edmund Truell, co-founder of the Pension SuperFund, and Professor Stephen Heppell, who advised the Department for Education on the Stephenson Report and chaired its Education Technology Advisory Group in 2016, are each proceeding with cases against TPS decisions that could find their way to the ombudsman.

Heppell has been asked to repay £98,000, and has had his pension reduced by £1,000 a month, after the scheme reversed its decision to not pursue an overpayment it discovered almost a decade ago.

He told Pensions Expert: “I moved from being employed by one university to being employed by several in 2004. On TPS advice, I opted to pay both employers and employees contribution to keep things simple going forwards. They invoiced me annually, I paid punctually.”

I would say at this point that no pension in the TPS scheme is safe, whatever documents or assurances you have. The only sensible route if nothing changes must be for every teacher to take their pension out of the scheme fast

Professor Stephen Heppell

He explored the possibility of retiring in 2010, and made a decision based first on a draft statement from TPS informing him of the pension he was entitled to, which was subsequently confirmed on his request.

TPS paid that pension for a decade “until last year when a bizarre phone call [someone] told me ‘we have made a mistake. Everything we told you was wrong. Can we have £98,000 back and how would you like to pay?’”

When Heppell inquired as to the reason for the change, TPS admitted it had made a mistake but said it was unable to provide further details as its “systems were down”, he explained.

“I had paid the correct amounts, I had believed everything they told me, but in some way they now wanted to base my pension on my last year at a single university. Curiously, in that year I earned a very large salary, but when I showed TPS this they insisted on ignoring it and have taken a smaller number.”

TPS subsequently presented an internal memo, dated from around 2010, in which it identified the overpayment but decided not to pursue it, he said.

“Had I known their error I could have changed tack at any stage, and have correspondence to confirm that,” Heppell continued.

He added that questions should be asked of the Department for Education, which — in response to a freedom of information request by Pensions Expert’s sister publication FTAdviser in 2019 — confirmed it would not look to recover the £15m in overpayments discovered that year stemming from a data-matching exercise with HM Revenue & Customs.

Pensions Expert understands that this decision was related to a group of cases affected by guaranteed minimum pension updates, being specific to those circumstances, and does not apply to other overpayment cases.

Where overpayments do occur in general, TPS has a duty to recover these to protect the use of public money.

Heppell has until the end of the year to lodge an appeal with the Department for Education, which he intends to do. He is also considering taking the matter to the Pensions Ombudsman.

He said: “I did everything that was asked of me, followed TPS advice to the letter, paid their annual invoices promptly and in full, believed and acted on their clear unwavering information about my pension and yet, nearly 20 years on from that initial conversation with them, they have decided that their internal paperwork error warrants them to demand almost £100,000 immediately, with a cut to my monthly pension of around £1,000.

“And they communicated that to me in a phone call with initially no paperwork at all. I assumed it was a scam.”

Heppell added that he has retained all of the correspondence with the scheme, and has substantial records dating back 30 years.

“I would say at this point that no pension in the TPS scheme is safe, whatever documents or assurances you have. The only sensible route if nothing changes must be for every teacher to take their pension out of the scheme fast,” he said.

Show us your papers… from the 1950s

Truell also alleged maladministration on the part of the scheme with regards to his mother, who has been denied the pension he says she is entitled to because she is unable to produce payslips dating back to the 1940s.

Truell’s mother worked as a teacher from 1946 to 1979 and served around the world with the occasional maternity break. She began in Hammersmith, moving then to an army school in Cyprus, then set up a school for the British embassy in Ethiopia. She also worked in army schools in Germany for the British Army on the Rhine, as well as stints in private schools in Surrey and Berkshire.

“[TPS] refuse to recognise any of this service as ‘we have no record of her working after 1948’. They argue she commuted her pension in 1948 (which she did), and then demanded her ‘payslips’ to prove she worked thereafter,” Truell explained. 

“They have only a few months’ records of her working as a supply teacher in 1974 in Berkshire. Needless to say my mother does not have her payslips from half a century ago.”

The Truells have been in discussion with TPS since 2011, and Truell contends that his mother was “browbeaten” into “accepting a paltry sum in return for forgoing her rights”. 

She was offered a lump sum of £200 accounting for the nine months’ service for which the scheme had records, but she did not accept it. She was offered 3 per cent interest on her contributions, which Truell said “sits poorly in comparison with a period of nearly 50 years when even bond rates were in double figures for much of the period”.

They also deducted tax and national insurance, which he contends was “inappropriately calculated”, and did not account for home responsibilities protection.

He said his mother should in fact be entitled to a pension of around £5,000 a year.

Truell told Pensions Expert that TPS refused to allow him to speak to them on his mother’s behalf, insisting that the matter be dealt with via an online portal, which he said was “incredibly complex” with “no easy navigation or design” and could easily “put people off”.

“If my mother gave up in despair, how many other teachers have?” He said that TPS replied via the secure portal that it considers the case closed and is not prepared to reopen it.

Truell is now exploring other options, including bringing the matter before the ombudsman’s early resolution team.

TPS declined to comment.