Local Government Pension Scheme Appeal Determination By The Secretary of State

Our Ref: LGR85/18/9

17 February 1998

272 INDEX

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1995 (“the 1995 regulations”)

1. I refer to your letter of 25 August 1997 in which you appeal (under J8 of the 1995 regulations), to the Secretary of State for the Department of Environment, Transport and the Regions against the decision of Mr XXX, the Appointed Person. The Appointed Person upheld XXX Pension Fund’s decision to refuse to transfer your pension rights to a scheme administered by XXX (the company).

2. The question for determination by the Secretary of State is whether you can transfer your pension rights in the local government pension scheme (LGPS) to a scheme administered by the company.

3. The Secretary of State has considered all the representations and evidence. Copies of all the documents supplied by the Appointed Person and the company have been sent to you.

4. Secretary of State’s determination: The Secretary of State having taken into account the appropriate Acts and regulations, finds that the scheme administered by the company does not meet the necessary requirements. His decision confirms that made by the Appointed Person. The Secretary of State’s reason and the Acts and regulations which he considers apply in your case are set out in the annex to this letter, which forms an integral part of the determination. He is acting judicially and has no power to modify the application of the Acts or regulations to the facts of the case. Having made his determination he has no power to alter it unless instructed to in a judgement by the High Court. Because of this officials may not discuss the case further.

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

6. The Pensions Ombudsman may investigate and determine any complaint or dispute of fact or law in relation to the local government pension scheme. His address is 11 Belgrave Road, London, SW1V 1RB (telephone number 0171 834 9144).

EVIDENCE RECEIVED

1. The following evidence has been received and taken into account:

a. from Mr XXX: letters dated 25 August 1997, and 24 September 1997 with enclosures;

b. from the Appointed Person: letter dated 2 October 1997 with enclosures; and

c. from the company: letter dated 9 December 1997.

REGULATIONS CONSIDERED AND REASONS FOR DECISION

2. From the evidence submitted the following relevant points have been noted:

a. you were employed by the XXX (employing authority) from 23 June 1980 to 21 April 1989;

b. you became a member of the LGPS on 23 June 1981; and

c. on leaving the employing authority you became entitled to deferred benefits in the LGPS.

3. The Secretary of State in reaching his decision has had regard to the Acts and regulations, which in his view, apply. The 1995 regulations allow a former member of the LGPS to transfer their deferred benefit entitlement (cash equivalent) out of the LGPS subject to certain conditions set out in regulation K2 of the 1995 regulations and section 95 of the Pension Schemes Act 1993 (the 1993 Act). The Secretary of State has, therefore, had to consider whether you meet these conditions. The Secretary of State concludes that you meet the conditions required by regulation K2. He has next had to consider whether you meet the conditions of section 95 of the 1993 Act.

4. The conditions of section 95 of the 1993 Act are as set out in the Appointed Person’s letter at paragraph 5 (a), (b), (c) and (d). The Secretary of State concludes that you do not meet conditions (a) and (b) as these apply only in the United Kingdom. He has, therefore, considered (c) and (d). Under (c) the insurance company must carry on ordinary long-term insurance business in the United Kingdom or any other member State (Section 19(4)(a)). Member State refers to the European Community. The company has confirmed that they are not authorised to carry on insurance business in the UK or European Community.

5. The Secretary of State has next considered (d). The prescribed requirements for other pension arrangements are set out in the Occupational Pension Schemes (Transfer Values) Regulations 1996. Pension arrangements refers to an overseas arrangement or a self-employed pension arrangement (regulation 12(5). A self employed pension arrangement means a personal scheme within the meaning of Chapter IV of the Income and Corporation Taxes Act 1988 and approved by the Inland Revenue. On the evidence available it would appear that the company is not approved by the Inland Revenue. The Secretary of State has, therefore, considered whether an overseas arrangement applies in your case. The meaning of “overseas arrangement” is as set out in paragraph 9 of the Appointed Person’s letter. However, section 96 of the 1993 Act requires that where a member with deferred benefits wishes to transfer his pension the whole of his cash equivalent must be transferred. This includes the guaranteed minimum pension. The guaranteed minimum pension may be transferred to an overseas scheme but must comply with regulation 6 of the Contracting-out (Transfer and Transfer Payment) Regulations 1996. One of the requirements is that the transfer is made to a scheme which relates to the person’s employment. The Secretary of States notes that this is not the case.

6.The Secretary of State concludes, therefore, that you are unable to transfer your local government pension to the company for the reasons set out above.