329      INDEX

Our Ref: LGR 79/1/1493

April 1998

 

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1995 (“the 1995 regulations”)

 

1.         I am directed by the Secretary of State for the Environment, Transport and the Regions to refer to your notice of appeal submitted under regulation J5 of the 1995 regulations against the decision of XXX (“the council”) about the amount of pensionable remuneration taken into account in calculating your retirement benefits.

 

2.         The appeal has been conducted by correspondence.  Consideration has been given to your letters of 12 January, 19 May and 27 July 1996, 19 January and 4 November 1997; and to the council’s letters of 24 April, 2 July, 8 August and 10 September 1996, 12 September and 4 November 1997; and to all copy correspondence enclosed with those letters.

 

3.         The question for determination is whether your retirement benefits have been correctly assessed by the council, which involves a further decision as to whether certain payments made to you during the course of your employment should be included as part of your pensionable remuneration for the purposes of the 1995 regulations.

 

4.         From the evidence submitted the following points have been established;

 

(a)        you commenced local government pensionable employment on 1 October 1962;

 

(b)        you took early retirement on 31 December 1995 and were awarded 4 years 275 days compensatory added years;

 

(c)        your total reckonable service and qualifying service amounted to 33 years 92 days;

 

(d)        during the final twelve months of your service with the council you were nominated to carry out additional duties as a Proper Officer and Interim Monitoring Officer for the XXX County Borough Council (“XXX”) from 5 May 1995 to 31 August 1995, and for the XXX County Borough Council (“XXX”) from 5 May 1995 to 18 June 1995;

 

(e)        in recognition for these additional responsibilities you were paid a 15% supplement to your salary on which 6% superannuation contributions were deducted by the council from your salary;

 

(f)         these payments were funded by XXX and XXX;

 

(g)        on your retirement these two payments were not included as pensionable remuneration with your main salary for the final twelve months of your service with the council and you were awarded two separate preserved benefits with the two Shadow Unitary Authorities; and

 

(h)        you appealed to the Secretary of State against the council’s decision for not including a sum of £4,834.16 with your annual salary you earned in the final twelve months of your service.

 

5.         The council contend that your pensionable remuneration has been correctly assessed based on the salary you earned in respect of your employment with the council.  They also contend that separate pensions based on the monies paid to you for the duties carried out by you during the final twelve months of your service for XXX and XXX as a variable- time employee have been correctly assessed.

 

6.         The Secretary of State has considered all the representations and evidence.  He is required to determine the same question, as to your rights under the regulations, as fell to be decided in the first instance by the council.  He is acting judicially and has no power to modify the application of the regulations to the facts of the case.

 

7.         Regulation D1 of the 1995 regulations provides (with some exceptions which do not apply in your case) that:

 

“D1. - (1) A person’s pensionable remuneration in relation to a local government employment, is his remuneration for so much of the relevant period as he is entitled to count as a period of membership in relation to that employment.

 

(2) For the purposes of this regulation, the relevant period is -

 

(a) the year ending with the day on which the person ceases to be a member; or

 

(b) such other period as in accordance with Schedule D1 is to be regarded as the relevant period.”

 

8.         “Remuneration” itself is defined under regulation C2 of the 1995 regulations.  This provides, as far as is relevant, that:

“C2. - (1) ... in these regulations  “remuneration”, in relation to an employee, means the total of -

 

(a) all the salary, wages, fees and other payments paid to him for his own use in respect of his employment ...

 

and any other payment or benefit specified in his contract of employment as being a pensionable emolument ... ”.

 

9.         Variable-time employment is defined under regulation B3.  As far as is relevant it states the following:

 

“B3. - (3) For the purposes of these regulations-

 

(a) an employee is a variable-time employee if in accordance with his terms of office or contract of employment he is to be treated as such for the purposes of the Scheme and either-

 

(i) his remuneration is calculated by reference to his obligations in his employment (rather than necessarily by reference to the number of hours he has worked), or

 

(ii) he holds an office or employment the functions of which are only exercisable on an occasional basis;

 

(b) and (c) ... ”

 

10.       The definition of “remuneration” under regulation C2 thus comprises payments made to an employee, and allowances in kind appertaining to that employment.  There is no dispute about the superannuability of the additional payments made to you in the last twelve months of your service.  The council argue that these payments did not form part of your contract of employment with them and therefore should not form part of your pensionable pay. 

 

11.       It is clear that you were appointed to carry out interim duties for two separate authorities other than the council while you remained an employee of the council.  The appointments were made by XXX and the XXX respectively. The minutes of XXX’s first annual general meeting refer to that council as the body who appointed you as acting proper officer and monitoring officer.  The XXX in their letter dated 9 August 1995 referred to you completing duties for them.  The report of the XXX County Council’s Director of Finance dated 3 November 1995 refers to duties undertaken for the XXX shadow authority and to the fact that the duties were undertaken in your own time.  The payments totalling £4,834.16, were in respect of these duties and did not form part of your remuneration appertaining to employment with the council.  The Secretary of State agrees with the council that you were a variable-time employee within the meaning of regulation B3(3) of the 1995 regulations in the capacity you worked for those councils.  The payments in connection with your duties for XXX were fully reimbursed by that council to XXX County Council.  Payments for your duties for the XXX were paid by that council.

 

12.       The Secretary of State concludes therefore, that as these payments were for other duties not connected with your council employment, that the council has correctly determined the question of what constitutes pensionable remuneration, and dismisses your appeal.

 

13.       A copy of this letter has been sent to the council.

 

14.       The above constitutes the Secretary of State’s determination of this case.  It is final and cannot be changed except by a judgement in the High Court.  As the Secretary of State’s jurisdiction is now at an end; officers may not discuss or comment on the case further.