Local Government Pension Scheme Appeal Determination By The Secretary of State

330 INDEX Our Ref: LGR85/18/35

may 1998

LOCAL GOVERNMENT PENSION APPEAL

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT SUPERANNUATION REGULATIONS 1974 (the 1974 regulations)

LOCAL GOVERNMENT SUPERANNUATION REGULATIONS 1986 (the 1986 regulations)

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1995 (the 1995 regulations)

1. I refer to your letter of 23 February 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 Mr XXX, the Appointed Person for XXX (the council). The Appointed Person found that the council had correctly interpreted the regulations following the recalculation of your benefits due to an earlier decision made by him, dated 19 August 1997.

2. You asked the Secretary of State to reconsider a number of issues. I explained, in my letter of 25 February 1998, that the Secretary of States jurisdiction under regulations J8 and J9 of the 1995 regulations is limited to reconsidering a disagreement about a matter relating to the local government pension scheme, which effectively means whether or not the pension scheme regulations have been correctly applied in the given circumstances. I further explained that the Secretary of State had no powers to consider on appeal matters of disagreement between employees or former employees and their employing authority relating to compensation or adjustments under the Local Government (Compensation for Premature Retirement) Regulations 1982 (the 1982 regulations), Local Government (Compensation for Redundancy and Premature Retirement) Regulations 1984 or the Local Government (Discretionary Payments) Regulations 1996.

3. You wrote further on 6 and 9 March 1998. In your letter of 9 March you explained that your appeal is against the abatement of your lump sum retirement pension and the capital sum also taken from your lump sum retirement pension to cover your additional monthly pension contributions which you consider your employer had agreed to take over by way of compensatory added years. From the papers received from the council it appears that attached to Mrs XXX's letter of 29 August 1997 was a summary of benefits (estimate) statement. Paragraph A5. refers to less the clawback due to termination payment and less capitalisation of incomplete contract. This summary of benefits refers to both your local government pension benefits and to the award of compensatory added years.

4. The abatement of 4816.95 is actually an adjustment to your award of compensatory added years. These added years were awarded under the 1982 regulations as compensation and do not come under the pension scheme. So it is your compensation, not your pension, that has been abated. Thus, as I have explained, this is not a matter the Secretary of State can consider.

5. The only question for determination by the Secretary of State therefore is whether the council were correct in deducting a capital payment from you to cover the outstanding monthly payments for your pre-1972 service.

6. 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 Departments letter of 10 March 1998.

7. Secretary of States determination: The Secretary of State having taken into account the appropriate regulations, finds that for the purposes of the 1986 regulations, you were required to pay a capital sum payment to cover the outstanding monthly payments for your pre-1972 service. His decision confirms that made by the Appointed Person. The Secretary of States 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 powers 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.

8.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).

9. 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 23 February, 6 and 14 March 1998 with enclosures, and letter dated 9 March 1998; and

b. from the Appointed Person: letter dated 5 March 1998 with enclosures (listed in the Departments letter of 10 March 1998).

REGULATIONS CONSIDERED AND REASONS FOR DECISION

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

a. you were employed by XXX Council (the district council);

b. you were a member of the local government pension scheme;

c. in 1979 you elected to pay additional contributions by instalments to avoid reduction of retiring allowance and death grant for pre-1972 service;

d. you were made redundant by the district council on 31 December 1988; and

e. a capital sum was deducted from your lump sum local government retiring grant to cover the cost of the uncompleted additional contributions.

3. The Secretary of State in reaching his decision has had regard to the regulations, which in his view, apply. The Secretary of State notes that you consider the additional contributions did not cease in 1988 but that the district council had agreed to continue payment by awarding you compensatory added years. The Secretary of State has had regard to the 1986 regulations which were in force when your employment with the district council ceased. Schedule 5 Part IV deals with the matter of uncompleted payments. Paragraph 11(b)(i) makes it clear that this includes the situation where the employee ceases to hold his employment. Under paragraph 14 of that Part, where a member ceases his employment due to redundancy, as in your case and wishes the payments to be treated as completed, he is required to pay an amount calculated by the fund’s actuary to represent the capital value of the instalments or additional contributions remaining to be paid. Otherwise, under paragraphs 15 and 12, the period of reckonable service being purchased has to be proportionately reduced. There are no provisions in the regulations which require or allow the council to deem the payments as continued through to completion because they have awarded compensatory added years under the quite separate provisions of the 1982 regulations.

4. The Secretary of State concludes that you were required to pay a capital sum payment to cover the outstanding monthly payments for your pre-1972 service.