Local Government Pension Scheme Appeal Determination By The Secretary of State

Our Ref: LGR85/18/31

18 May 1998

LOCAL GOVERNMENT PENSION APPEAL

SUPERANNUATION ACT 1972

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

1. I refer to your letter of 3 March 1998 in which you appeal (under regulation J8 of the 1995 regulations) to the Secretary of State for the Environment, Transport and the Regions against the decision of Ms XXX, the Appointed Person. The Appointed Person found that the calculation of the additional period of service (additional period of membership) made in XXX Council’s (the council) letter dated 20 May 1997 of 17 years and 235 days correctly reflects the requirements of regulations K13, 14 and 15 of the 1995 regulations. Her decision upheld the council’s decision to offer 17 years and 235 days as an additional period of membership.

2. The question for determination by the Secretary of State is whether the council acted correctly in taking into account the difference in your former and current salary levels in determining the appropriate period of membership in the Local Government Pension Scheme on transfer from the TPS.

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 18 March 1998.

4. Secretary of State’s decision: The Secretary of State having taken into account the appropriate regulations, finds that for the purposes of the 1995 regulations, the council applied the regulations correctly in calculating the additional period of membership. This decision replaces the Appointed Person’s decision of 12 February 1998 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).

EVIDENCE RECEIVED

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

a. from Mr XXX: letters dated 3 March and 4 February 1998, with enclosures;

b. from the Appointed Person: letter dated 16 March 1998 (listed in the Department’s letter of 18 March 1998), with enclosures; and

c. from the council: letter dated 14 May 1998 (copy enclosed).

REGULATIONS CONSIDERED AND REASONS FOR DECISION

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

a. you were a member of the Teachers’ Pension Scheme (TPS) until 31 August 1995;

b. your period of service in the TPS had been calculated on 18 years and 126 days;

c.you joined the Local Government Pension Scheme (LGPS) on 1 September 1996.

d. you asked XXX Council (the council), the administering authority for the local government pension fund, to investigate transferring your pension benefits from the TPS;

e. you were informed by the council, in their letter of 20 May 1997, that you would be credited with a period of membership amounting to 17 years and 235 days;

f. the council, in their letter of 27 June 1997 confirmed the period of additional membership as 17 years and 235 days.

3. You contend that the Appointed Person in reaching her decision has not taken into account a number of issues you have raised. You do not accept that your years in the TPS should be reduced for the following reasons:

a. to become an educational psychologist you must have 2 years teaching experience;

b. you had to fund your training and during this time you had no income and no pension contributions;

c. during your training you took two temporary mainscale teaching posts and the transfer value of your TPS benefits are apparently based on the pay of these posts even though you paid into the fund on a deputy heads level for 10 years;

d. you do not have your years of service in the TPS reduced if you are promoted;

e. in the TPS you can retire at 60, whereas in the LGPS it is 65 unless you have twenty five years service;

f. you are offered very little protection in the LGPS and your contributions cannot be transferred unless you have 2 years service;

g. you are not prepared to have your years of service in the TPS devalued, but without a transfer to the LGPS there is little incentive to remain as an educational psychologist; and

h. you believe that had you stayed in teaching you would by now be a headteacher, with pension rights better than those in the LGPS.

You believe that given your particular circumstances a reduction in your years of service cannot be justified or acceptable.

4. The Appointed Person found that if a transfer payment is accepted the member will be granted an additional period of membership calculated under regulation K15. She determined that the calculation of the additional period of membership offered of 17 years 235 days correctly reflects the requirements of the 1995 regulations.

5. The Secretary of State sought further information from the council with regard to which regulation they had used in calculating the additional period of membership. The council stated that they had used regulation K16 as the transfer was from a club scheme.

6. The Secretary of State notes your contention that the Appointed Person has not taken into account a number of issues you raised which are recorded in paragraph 3 above. Essentially you are arguing not that the 1995 regulations have been applied incorrectly but that they have been applied unfairly. The Secretary of State’s powers under regulation J8 and J9 of the 1995 regulations are limited to reconsidering a disagreement about a matter in relation to the LGPS, which effectively means whether or not the regulations have been correctly applied in the given circumstances. Questions of whether the regulations are fair are irrelevant in the context of an appeal. Like the Appointed Person the Secretary of State has no power on appeal to direct a local authority to act outside the provision of the regulations. He has therefore considered whether the Appointed Person’s decision correctly reflects the provisions of the 1995 regulations.

7. The Secretary of State in reaching his decision has therefore had regard to the regulations which, in his view, apply. Regulation K13 allows a member of the LGPS, subject to certain conditions, to transfer in accrued rights from other pension schemes. When a transfer value is accepted under regulation K13 a member is entitled to count a period of additional membership calculated in accordance with regulation K15 or K16. Regulation K16 makes special provision where the transfer is from a club scheme and the application is made within twelve months of the member joining the LGPS. Regulation K9 explains that a club scheme means an occupational pension scheme which fulfills certain conditions. In this case club scheme includes the TPS. Under regulation K16(3), regard shall be had, among other things, to the rate of remuneration used by the managers of the scheme making the payment in determining its amount.

8. The Secretary of State notes that the Appointed Person considered that the additional period of membership should be calculated using regulation K15. For the reasons set out in paragraph 7 above the Secretary of State finds that the Appointed Person was wrong to consider regulation K15 but concludes that the council calculated the additional period of membership using the correct regulation, that is regulation K16, and that your former salary level is a factor to be taken into account in determining the appropriate period of membership in the LGPS