Local Government Pension Scheme Appeal Determination By The Secretary of State

Our Ref: LGR 79/1/1539 442 INDEX

Date: 30 OCTOBER 1998

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT SUPERANNUATION REGULATIONS 1986 (“the 1986 regulations”)

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 County Council or XXX County Borough Council (“the council”), who have taken over responsibility for the administration of your pension, on your local government pension scheme (“the scheme”) contributions.

2. The appeal has been conducted by correspondence. Consideration has been given to your appeal form of 29 April 1996, your letters 7 September 1996, 29 May and 13 November 1997; the council’s letters of 25 July 1996, 20 May and 19 November 1997, 7 May and 11 September 1998; and to all copy documents enclosed with those letters.

3. The Secretary of State takes the view that the question for determination is whether your ill-health retirement benefits have been calculated correctly.

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

(a) on 17 November 1988 you started work with the council as a Trainee Journey Worker;

(b) you became a member of the Local Government Superannuation Scheme (“the scheme”) in your second year of employment;

(d) on 14 November 1994 you reverted to your substantive post;

(e) on 23 November 1995 you retired on the grounds of permanent ill-health; and

(f) on 29 April 1996 you appealed to the Secretary of State against the council’s award of benefits.

These facts have been agreed by both parties.

5. You contend that the contributions you paid towards your pension are not reflected in your benefits. You state that you first started paying pension contributions at the rate of £7.50 per week and when you were made up to an assistant foreman you paid £15 per week.

6. The council contend that prior to your promotion your contributions were £7.17 per week, on your promotion they were increased to £9.77, then to £10.44 and on reversion to your former post they were £7.48. They maintain that your contributions were deducted at the rate of 5% but that some arrears were collected following your reversion.

7. All the representations and evidence submitted have been considered. The Secretary of State is required to determine the same question as to your rights under the regulations which 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.

8. When you joined the scheme and when you were promoted regulation C2 of the 1986 regulations provided for pension contributions. It stated, as far as is material, the following:

“C2(1) ... a pensionable employee shall, at such intervals as the appropriate administering authority may determine, make contributions to the appropriate superannuation fund in respect of every employment in which he is a pensionable employee.

(2) The amount of contribution to be made for any period is -

(a) in the case of a manual worker, 5%, and

b) .... in the case of an officer, 6%,

of his remuneration ... ”.

9. The Secretary of State accepts that as a Trainee Journey Worker you were required to contribute towards your pension 5% of your remuneration as a manual worker in your substantive post. It appears from the council’s letter of 11 September 1998 that for the period of your temporary promotion you were classed as an officer, and deductions of an additional 1% were made (albeit retrospectively). You have not disputed that your contributions were deducted at the appropriate level nor that the amounts were wrong, rather that they are not reflected in your retirement benefits.

10. The way benefits were assessed when you retired were set out in the 1995 regulations. As far as is material to your appeal they provided for your benefits as follows:

“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.”

Paragraph 5 of schedule D1 states:

“5. Where the member’s pensionable remuneration would be higher if either of the two years immediately preceding the period applicable under regulation D1(2)(a) were the relevant period instead of that period, the relevant period is whichever of those years yields the highest amount.”

In your case your pensionable remuneration/pay was higher on the year preceding your last year of employment therefore 24 November 1993 to 23 November 1994 was the relevant period. Using pensionable pay from this period your pension and lump sum benefits were provided for in the 1995 regulations as follows:

“D2.-(1) Subject to paragraphs (2) and (3), in these regulations, in relation to any person-

(a) “standard retirement pension” means a pension payable at an annual rate equal to one eightieth of his pensionable remuneration, multiplied by the length in years of his total period of membership; and

(b) “standard retirement grant” means a lump sum of an amount equal to three eightieths of his pensionable remuneration, multiplied by the length in years of his total period of membership.”

In addition to the above you received ill-health retirement benefits from when you ceased employment provided by regulation D7(2). This entitled you to an additional period of membership as set out in paragraph 2 of schedule D3 as follows:

“2.-(1) ... the additional membership period is-

(a) in a case where the length of the relevant membership period is less than 10 years, a period equal to the length of the relevant membership period ...”

Your period of membership was therefore doubled. These benefits are not directly related to the amount of contributions paid. Rather they were calculated by reference to your membership period from 17 November 1989 to 23 November 1995 (6 years 7 days) plus the ill-health enhancement period multiplied by your pensionable pay divided by eighty to arrive at your pension and again by three to give your lump sum. Your benefits were therefore calculated as follows:

6 and 7/365 years x 2 x 1/80th x £10,497.89 = £1,579.72 retirement pension; and

retirement pension x 3 = lump sum.

11. The Secretary of State therefore determines as set out above that your ill-health retirement benefits have been calculated correctly and dismisses your appeal.

12. Having made his determination the Secretary of State has no power to alter it but you may refer the matter to the Pensions Ombudsman or to the High Court. Because of this officials may not discuss the case further.

13. The Occupational Pensions Advisory Service (OPAS) is available to assist members and beneficiaries in connection with difficulties which they have failed to resolve. Their address is 11 Belgrave Road, London, SW1V 1RB (telephone number 0171 233 8080).

14. The Pensions Ombudsman may investigate and determine any complaint or dispute of fact or law in relation to the LGPS made or referred in accordance with the Pension Schemes Act 1993. His address is 11 Belgrave Road, London, SW1V 1RB (telephone number 0171 834 9144).

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