Our Ref: LG R  79/1/1648

DATE:       NOVEMBER 1997

319        INDEX

 

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 County Council ("the council") regarding your local government pension scheme (“the LGPS”) benefits.

 

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

 

3.  The question for determination is whether pension was calculated correctly.

 

 

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

 

          (a) you were employed by the council for 13 years and 163 days;

 

(b) from 16 May 1983 to 31 August 1992 you were working between 32½ to 35 hours per week;

 

          (c) you retired on grounds of permanent ill-health on 26 October 1996; and

 

(d) as a result your service was enhanced by 6 years and 84 days;      

 

(e) the council proportionately reduced your service between 16 May 1983 to 31 August 1992 and your pensionable remuneration calculations were based on 18 years and 291 days.

5.  You appealed to the Secretary of State against the council’s calculations of your pension. You contend that your service between 16 May 1983 to 31 August 1992 should have been considered as whole-time and your pension should have been calculated on 20 years.

 

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.    When you started employment with the council the 1986 regulations applied. The relevant definitions are contained in the glossary of expressions table in schedule 1 of these regulations as follows:

 

 

 

8.  The definition of whole-time was changed by the introduction of the 1995 regulations and as far as is material the relevant 1995 regulations are quoted below. Whole-time is defined in regulation B3 as follows:

 

“(3) For the purposes of these regulations-

 

 

(a) ...

 

(b) an employee is a whole-time employee if his contractual hours are less than           the number of hours which, in accordance with his terms of employment, is                the number of contractual hours for a person employed in that on a whole-time                  basis;

 

(c) ...

 

(4) In these regulations-

 

“the contractual hours” means-

 

(i) the number of hours the employing authority are entitled to require the                             employee to work in each of the contractual weeks...

 

(ii) ...

 

(iii)...

 

“the contractual weeks” means the number of weeks in every period of 12 Months for          which (on that assumption) a wage or salary is payable to the employee”.

 

9. Your retirement benefits during your local government between 16 May 1983 to 31 August 1992 should have been calculated as required by regulation E30 of the 1986 regulations as they applied at that time as follows:

 

“...For the purpose of calculating the amount of any benefit -

 

(a)      any period which is reckonable as reckonable service by virtue of its having been reckonable under the former regulations as contributing service shall, subject to regulations E25 and E26 (part-time and non-contributing service), be counted at the same length as it would have been counted for the purpose of calculating any benefit under the former regulations,...”

 

As far is material, reckonable service is defined under section 12 of the 1937 Act as service to which someone,...  “was required to contribute to the appropriate superannuation fund”. Your pension proportionately reduced as part-time worker under E25 or as is now contained in B15 of the 1995 regulations.

 

10. B15 of the 1995 regulations refers to the calculation of part-time membership as follows:

 

“(1) For the purpose of calculating the amount of any benefit under these regulations-

(a) ...

 

(b) ... a period of membership in part-time service in local government employment shall be treated as though it had been a proportionately reduced period of membership in whole-time local government employment.

 

(2) In paragraph (1)-

 

            ...

 

      "proportionately reduced" means reduced in the proportion which the number of  contractual hours during the period of part-time service in the employment, bears to    the number of contrac­tual hours of that employment if it were on a whole-time basis.”

 

11.  Regulation D1 of the 1995 regulations defines pensionable remuneration as follows:

 

“...(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) ...”

 

In your case the relevant period was 24 October 1995 to 25 October 1996. Lastly, schedule D1 provides for the pensionable remuneration of part-timers as follows;

 

“7. ...for the purposes of regulation D1 and this Schedule, a member is, in respect of   any period of part-time local government employment, to be treated as having   received the remuneration which would have been paid in respect of a single comparable whole-time employment.”

 

12.  In your case the relevant period as provided by the above regulation was 1 March 1995 to 29 February 1996. Your annual pension and lump sum are provided for as follows:

 

     “D2.-(1)... 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.

 

 

(2)...(3)”

 

13.  From the evidence supplied your pensionable remuneration in your last year of service or the “relevant period” was £11,774.48. Your period of membership in local government employment has been shown to be 12 years 207 days. Furthermore, your period of membership is enhanced to offset your early retirement on ill-health grounds. The regulations provide for this as follows:

 

“D7.-(1) ... where a member who ceases to hold a local government employment-

 

(a) has a statutory pension entitlement, and

 

(b) is incapable of discharging efficiently the duties of that employment by                  reason of permanent ill-health or infirmity of mind or body,

 

he is entitled-

 

(i)  to a standard retirement pension, and

 

(ii) to a standard retirement grant,

 

which are payable immediately on ceasing to hold that employment.

 

(2) Where the member’s total period of membership is at least 5 years, he is to be treated for the purposes of this regulation as being entitled to count as a period of  membership an additional period calculated in accordance with Schedule D3"

 

Schedule D3 states, as far as is relevant, as follows;

 

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

 

(a) ...

 

(b) ...

 

    (i) the period by which the length of the relevant membership period falls                     short of 20 years, or

 

     (ii) if longer, 6 243/365 years.

 

(2) ...”

 

With enhancement provided by Schedule D3, your pensionable remuneration by D1, and the formula for your  “standard retirement pension” provided by D2, the calculation of your annual pension can be summarised as follows:

 

1/ 80 X £11,774.48 X 20 (13 163/ 365 + 6 202/365 ) years = £2,943.60

 

Three times your annual pension gives your lump sum or “standard retirement grant”.

 

14. The Secretary of State concludes that for the purpose of your pension your membership should be treated as a whole-time for your periods of your employment with the council and your period of local government service between             therefore dismisses the appeal.

 

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

 

16.  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, either in writing or over the telephone.