Our Ref: LGR 79/1/1620    395          INDEX

Date:        JULY 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 XXX City Council, (“the council”) on your local government pension scheme (“LGPS”) benefits.

 

2.         The appeal has been conducted by correspondence. Consideration has been given to your letters of 8th September and 19th November 1996; to the council’s letters of 24th October and 18th November 1996; and to all copy documents enclosed with those letters.

 

3.         The question for determination is whether your contributions were correctly refunded by the council.

 

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

 

a) you were employed by the Borough of XXX from 1st June 1980 to 11th September 1983;

 

b) you were subsequently employed by the council from 28th July 1986 to 30th             November 1986;

 

c) on 23rd July 1992, you were paid a refund of contributions;

 

d) you recommenced local government employment with XXX Social Services on 15th             November 1993;

 

e) you now wish to repay the contributions to enable your period of local government    employment to provide a pension and have appealed to the Secretary of State.

 

These facts have been agreed by the parties to the appeal.

 

5.         You maintain that you were badly advised by the council at the time the refund of contributions was made.

 

6.         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.

 

7.         Regulation C12 of the 1986 regulations, which were in force at the time, states:-

 

“C12 (1) This regulations applies to a pensionable employee who -

 

(a) ceases to be employed by a scheduled body, and

 

(b) on so ceasing does not become entitled to a retirement pension; and

 

(c) does not, within one month and one day after so ceasing to be employed,                 become a pensionable employee in any employment with any scheduled body...

 

(3) A person to whom this regulation applies who is entitled to reckon an aggregate of   less than 5 years’ reckonable service and qualifying service... is... entitled to receive a    payment under paragraph (7)...  

 

(7) A payment under this paragraph is a payment out of the appropriate superannuation             fund of a sum equal to -

 

(a) the aggregate amount of the person’s contributions to the fund...”

 

8.         As you had less than 5 years service the authority was required after one year to refund your contributions unless you had specifically elected to retain your contributions subject to you returning to local government employment, and membership of the pension scheme, or transferring such contributions to an alternative non-local government pension scheme. The Secretary of State finds that the council failed to comply with this provision.

 

9.         If no refund had been made at the time and no transfer was subsequently made you would have ultimately been entitled only to a refund of your contributions since at the time you left local government employment you had not satisfied the qualifying conditions for a pension to come into payment. Regulation E2 of the 1986 regulations, as far as is material state:-

 

“E2. - (1) ...when a person ceases to hold a local government employment he becomes             entitled in relation to that employment to an annual retirement pension and a lump sum    retiring allowance if -

 

(a)...

 

(b) the total of his reckonable service and any qualifying service is not less than              5 years...”

 

10.       On balance the Secretary of State accepts that since the council did not act correctly within one year of your leaving then it is appropriate to accept that, in absence of definite evidence, you were not properly advised of your right to elect to retain contributions in the scheme with the intention of transferring in accrued rights at some future time. Indeed within 16 months you would have been able to transfer your accrued rights from the council to XXX County Council (XXX). In the circumstances, the Secretary of State finds it appropriate for you to have the right to pay the previously refunded contributions, since if it had acted correctly the council would, on or after 15th November 1993, have been able to pay your returned contributions to XXX.

 

11.       The Secretary of State determines as set out above and allows the appeal.        

 

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

 

13.       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.