Local Government Pension Scheme Appeal Determination By The Secretary of State

256 INDEX

Our Ref: LGR 79/1/1647

Date: 20 January 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 submitted under regulation J5 of the 1995 regulations against the decision of the XXX City Council (“the council”) not to award you early payment of your preserved benefits on compassionate grounds.

2. The appeal has been conducted by correspondence. Consideration has been given to your letters; to the council’s letters; and to all copy documents enclosed with those letters.

3. The Secretary of State takes the view that the questions for determination are:-

(i) who is your last employer for the purposes of the Local Government Superannuation Scheme (“the LGSS”), and

(ii) whether your pension can be put into payment on grounds of compassion.

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

(a) you had previously been a local government employee and a contributing member of the LGSS from 22 November 1962 until 21 December 1993;

(b) you were an employee of the XXX Transport Company (“the company”), which was a Public Transport Company (“PTC”) until 21 December 1993;

(c) on 21 December 1993 the [THE COMPANY] PTC was sold to the employees and from that date you were unable to remain a contributor member to the LGSS;

(d) on 8 November 1995 and 8 July 1996 you applied for early payment of your preserved pension benefits on compassionate grounds; and

(e) you appealed to the Secretary of State against the council’s decision not to grant you your preserved benefits on compassionate grounds.

5. (a) you contend that the council has been less than sympathetic to your circumstances;

(b) you maintain you did not exercise the right to transfer your Local Government Pension Scheme (“ the LGPS” as was “the LGSS”) benefits to the [THE COMPANY]’s pension scheme because the company did not have indexation of benefits other than as required by the guaranteed minimum pension;

(c) you claim that you sought advice from the [THE COMPANY]’s pension scheme administrators who advised that a transfer was inappropriate;

(d) you further maintain that XXX City Council in granting you your preserved benefits would not incur financial liability to the local authority;

(e) you claim that your application for your pension benefits to be bought into payment early, was as a result of your personal circumstances and should be considered on an individual basis;

(f) you maintain that during the period 26 October 1986 to 21 December 1993, the [THE COMPANY] employer contributions to the LGSS and LGPS, were at a substantially higher rate than applied to other local authorities within the County, which you claim could have been anticipating the potential future liabilities for the early payment of pension benefits;

(g) you contend that after the council refused your ** application your attempts to appeal were thwarted by the council advising you that there was no further appeal process you could implement;

(h) you comment as a further example of the council’s unsympathetic handling of your application, that after submitting your second application and following several telephone calls the council sent you an assessment form for completion;

(i) you contend that it took the council several weeks and further telephone calls from yourself for them to reach a decision, nevertheless, you maintain without compassion for your situation;

(j) you comment that you had to sell your shares in the company and you were able to obtain part time employment at a substantially diminished salary;

(k) you maintain you have since gained full time employment with another organisation but at a considerably reduced salary from your position with the [THE COMPANY];

(l) you conclude that following the Transport Act 1985 you have had little option in the developments accumulating from this.

6. The council state that in exercising their discretion to determine whether to put your preserved benefits into payment on compassionate grounds, consideration had been given to all the circumstances surrounding the request and in particular to the financial circumstances of your family.

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 were decided in the ** 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. From the date of the establishment of the bus company as a public transport company by virtue of the Transport Act 1985, you were treated as if you were an employee of XXX City Council by virtue of Regulation B2(4A) of the 1986 Regulations. As far as is relevant the regulations state that:

“(4A) Every employee of a public transport company ("the ** company") in relation to whom a resolution under regulation 4 of the Local Government Superannuation (Miscellaneous Provisions) Regulations 1986 has effect shall for the purposes of these regulations be deemed to be in employment with the passenger transport executive or district council who passed the resolution.

(4B) ...................

(4C) ...................

(4D) ...................

(4E) Paragraph (4A) cease [s] to apply to a person if the ** company ceases to be a public transport company.”

Once the company was sold and it ceased to be a public transport company you were no longer able to remain a member of the LGSS by virtue of B2(4E).

9. For the purposes of the LGPS your last employer was therefore XXX City Council.

10. On subsequently being made redundant you approached both ** County Council as the relevant administering authority and XXX City Council, to see if they would exercise the option under regulation D11(1) and (2)(c)of the 1995 Regulations. As far as material these regulations state the following:

“D11.-(1) If a member who ceases to hold a local government employment-

(a) is not entitled under regulation D5, D6, D7 or D9 to retirement benefits which are payable immediately on his ceasing to hold that employment; and

(b) fulfils one of the following requirements, namely-

(i) he has a stationary pension entitlement; or

(ii) he is treated by virtue of regulation K23(2) as having ceased to hold that employment on becoming subject in it to an approved non-local government scheme;

then, subject to regulation D13, he becomes entitled in relation to that employment to a standard retirement pension and a standard retirement grant payable from the appropriate date; and in these regulations benefits to which a person becomes entitled under this paragraph by virtue of fulfilling one of the requirements mentioned in paragraph (b) and which have not yet become payable are called "preserved benefits".

(2) For the purposes of paragraph (1) "the appropriate date", in relation to any person, is his 65th birthday or, if earlier, the earliest of the following-

(a) ........;

(b) ..................;

(c) any date after he has attained the age of 50 years from which the employing authority determine on compassionate grounds that the benefits are to become payable.”

11. Since this decision under D11(2)(c) is one at the discretion of the employer the Secretary of State must give regard to regulation J5(2) of the 1995 Regulations which states;“Subject to paragraph (3), the Secretary of State shall not determine any question that fell to be decided by the relevant employer in the exercise of a discretion conferred on them by these regulations.”

12. The Secretary of State therefore dismisses this appeal has he has no power to determine a question which falls to be determined at the discretion of an employer and for the purposes of the LGPS this was XXX City Council. Neither does the Secretary of State have the power to deal with the contentions you have made concerning your treatment, as these are not questions which fall to be considered under the relevant regulations.

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.