294 INDEX Our Ref: LGR85/18/21
SUPERANNUATION ACT 1972
LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1995 (the 1995 regulations)
1. I refer to your letter of 29 December 1997 in which you appeal (under regulation J8 of the 1995 regulations) to the Secretary of State for the Department of the Environment, Transport and the Regions against the decision of Mr XXX, the Appointed Person. The Appointed Person found that the reduction in your remuneration resulted from circumstances within your control and therefore what he termed a certificate of material change should not be granted. His decision confirmed that of the XXX who considered that your re-employment under a new contract is not a material change for the purposes of the 1995 regulations.
2. The question for determination by the Secretary of State is whether a certificate can be granted to you due to a material reduction in your remuneration.
3. The Secretary of State has considered all the representations and evidence. Copies of all the documents supplied by the Appointed Person have been sent to you under cover of the Department's letter of 27 January 1998.
4. Secretary of State's determination: The Secretary of State having taken into account the appropriate regulations, finds that for the purposes of the 1995 regulations your reduction in remuneration is material and that the council should now issue a certificate of material reduction under Schedule D1 of the 1995 regulations. This decision replaces the Appointed Person's decision of 8 July 1997 made under regulation J7 of the 1995 regulations. The Secretary of State's reasons and the 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 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 LGPS. His address is 11 Belgrave Road, London SW1V 1RB (telephone number 0171 834 9144).
7. A copy of this letter has been sent to the Appointed Person.
EVIDENCE RECEIVED
1. The following evidence has been received and taken into account:
a. from Mr XXX: letter dated 29 December 1997, with enclosures; and
b. from the Appointed Person: letter dated 7 January 1997, with enclosures (listed in the Department's letter of 27 January 1998).
REGULATIONS CONSIDERED AND REASONS FOR DECISION
2. From the evidence received the following relevant points have been noted:
a. your substantive grade with the council was SM4(SCP 12);
b. your post at SM4 was deleted from the structure as part of the senior management review;
c. at that time you were aged 41;
d. you could have applied for posts at a similar or higher level;
e. one of the posts you could have applied for was the third tier post responsible for Cleansing;
f. had you opted to be considered for this post and been unsuccessful you would have been subject to the council's revised Redeployment and Redundancy Procedures;
g. you were offered a substantive post at PO 4, on the top pay point of PO 4, which you accepted; and
h. because of the pay difference you received a buy-out.
REGULATIONS CONSIDERED AND REASONS FOR DECISION
3. The Secretary of State in reaching his decision has had regard to the regulations, which in his view apply. The regulations which apply are as set out in the Appointed Person's letter. The Secretary of State notes that the council decided not to issue the certificate as they considered that your re-employment under a new contract was not a material change for the purposes of Schedule D1 of the 1995 regulations. He notes the Appointed Person's view that the reduction in your remuneration was not a material one because it resulted from circumstances within your control in that you had a choice whether to take a lower paid post or apply for substantive posts at a similar level.
4. The Secretary of State has considered the circumstances surrounding your re-employment at PO 4. He notes that your post was deleted. He further notes that you could then have applied for posts at a similar or higher level. He also notes that one of the posts you could have applied for was the third tier post responsible for Cleansing, but you did not do so. He also notes that, had you been unsuccessful, you would have been subject to the council's revised Redeployment and Redundancy Procedures. He notes that there may have been scope for temporary work for a period, but that this was unlikely. The Secretary of State concludes that it is likely that the council would have made you redundant had you not been successful. He also notes that the council have not provided any evidence to indicate that this would not have been the case had you applied for any other similar posts and been unsuccessful.
5. The Secretary of State accepts that you suffered a reduction in remuneration within the meaning of Schedule D1, sub-paragraph 4(4)(b), in that you were transferred to another employment under the same LGPS employer at a reduced remuneration. The Secretary of State has next taken account of sub-paragraph (5) which states that Subject to sub-paragraph (6) a reduction in remuneration is only material if it is such that the member's pensionable remuneration would be likely to be less if the relevant period were the period applicable under regulation D1(2)(a) than if it were the period applicable under sub-paragraph (1). The Secretary of State accepts that this is likely to be the case and therefore, subject to sub-paragraph (6), a reduction in remuneration is material in your case. Finally the Secretary of State has considered sub-paragraph (6) and specifically whether (6)(a) applies to your case, that is the provision that a reduction in remuneration is not material if it did not result from circumstances beyond the member's control. The Secretary of State takes the view that the deletion of your post was not in your control. He recognises that you did have the option to apply for posts at a similar or higher level of pay to that of SM4, but considers this immaterial because the outcome of any such application would not have been in your control, and no such post was guaranteed. He therefore concludes that it was not within your control to remain employed by the council at your then pay level, and accordingly that sub-paragraph (6)(a) does not apply.
6. The Secretary of State notes that due to the pay difference a buy-out payment was made to you. He further notes that the Appointed Person stated in his letter of 8 July 1997 that ... it has been the consistent policy of the Council not to issue a Certificate of Material Change in circumstances when employment rights have been bought out. As the regulations make no reference to such a payment, the Secretary of State takes the view that this is not an issue to be taken into account.
7. The Secretary of State concludes that, in your case, you suffered a reduction in your remuneration which is material for the purposes of Schedule D1 of the 1995.