Our Ref: LGR 79/1/1536        276    INDEX

 Date:   19  FEBRUARY 1998

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT SUPERANNUATION REGULATIONS 1986 ("the 1986 regulations")

THE 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 dated 10 April 1996 submitted under regulation J5 of the 1995 regulations against the decision of the XX City Council ("the council") not to treat the provision of a leased car as an emolument for pension purposes.

2. The appeal has been conducted by correspondence. Consideration has been given to your letters of 10 April and 15 November 1996; to XX’s (“XX”) letters of  7 and 25 October 1996;  and to all copy documents enclosed with those letters.

3. The question for determination is whether backdated contributions can now be paid in respect of a leased car, which was not regarded as a benefit in kind before 1 January 1993.

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

(a) you were employed by the council from 1 April 1974 until 31 March 1996;

(b) in connection with your employment you were provided with a leased car;

(c) you were a member of the council’s car lease scheme from 1 August 1989 until 31 August 1995;

(d) no superannuation contributions were deducted in respect of your leased car;

(e) on 25 January 1996 you applied to the council to include the money value of your former leased car in the calculation of your retirement benefits;

(f) on 10 April 1996 you appealed to the Secretary of State to be allowed to pay          additional contributions with regard to your former membership of the council’s leased          car provision, and for these additional contributions to be backdated with effect from 1       August 1989.

5.  You contend that you took early retirement only as a result of the successful in house bid under Compulsory Competitive Tendering; that the council did not advise you of the costs and benefits of treating the leased car as a pensionable emolument, and that it is inequitable that you should now be denied the benefit value of the leased car. XX state that you did not make any earlier representations about including the money value of your leased car in your pension benefits. They comment that all members of the council’s car lease scheme were notified in 1993 of the possibility of including the money value of their lease car in their pension benefits. They  maintain that you accept that you were aware of the situation, but you decided not to take any further action because of your age and the uncertainty that the car lease scheme would still be in existence when you retired. They state that the only employees paying additional contributions are those who made successful appeals.   

6.  The Secretary of State has considered all the representations and evidence. Under the 1986 regulations remuneration was defined to include benefits in kind. The figure is used for calculating contributions to and benefits from the scheme. The definition was modified with effect from 1 January 1993 specifically to exclude the money value of leased cars. This change was introduced following extensive consultation with all local government interested parties.  However,  the 1986 regulations were also amended to include a provision whereby employees who had a leased car  were entitled to count it as remuneration if contributions had been deducted on it up to 31 December 1992. A further provision was introduced whereby,  where the employer did not recognise it as a benefit in kind before 1 December 1992, an employee who had a leased car had to lodge any appeal with the Secretary of State by 31 March 1993.

7. The 1986 regulations were consolidated in May 1995 by the Local Government Pension Scheme Regulations 1995. The money value of leased cars was excluded from the definition of remuneration by virtue of regulation C2(2)(f). Regulation J5(4) of the 1995 regulations states:                                                       

"No appeal may be made requiring a determination that a  person's remuneration in respect of a period ending on or before 31 December 1992 includes the money value to him of the provision of a motor vehicle".

8. The Secretary of State concludes that the money value of a leased car cannot be included as remuneration unless either contributions were paid on it in the period up to 31 December 1992 or a successful appeal was lodged with the Secretary of State by 31 March 1993. 

9. The Secretary of State therefore dismisses your appeal as it is not one that can be made under the 1995 regulations.

10.  A copy of this letter has been sent to XX.

11. The above constitutes the Secretary of State's determination of the 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, no member of the Department may discuss or comment on the case further.