Our Ref: LGR85/18/44 347 INDEX
4 June 1998
LOCAL GOVERNMENT PENSION APPEAL
LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1995 (“the 1995 regulations”)
LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (“the 1997 regulations”)
1. I refer to your letter of 27 March 1998 in which you appeal (under regulation 102 of the 1997 regulations) to the Secretary of State for the Environment, Transport and the Regions against the decision of Mr XXX, the Appointed Person. The Appointed Person determined that your actual salary was the correct pensionable pay to be used in calculating your local government pension scheme (LGPS) benefits. The Appointed Person upheld the decision of the XXX (the fund) that your actual pay was the figure to be used in calculating your LGPS benefits.
2. The question for determination by the Secretary of State is whether your actual pay or the comparable whole-time pay for the job is the correct figure to be used in calculating your benefits.
3. In your appeal you made several complaints of maladministration against XXX Council. The Secretary of State cannot consider allegations of maladministration in a pensions appeal and this determination is therefore concerned only with the pensions question in paragraph 2.
4. The Secretary of State has considered all the representations and evidence. Copies of all the documents supplied by the Appointed Person (with the exception of the previous appeal determination) have been sent to you.
5. The 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 pensionable pay to be used in calculating your LGPS benefits is the comparable whole-time pay for the job. However in arriving at his determination the Secretary of State has had to have regard to the period of service for the period 1 January 1996 - 8 June 1997 and determines that this is not whole-time service but must be proportionately reduced to the whole-time equivalent. The fund in re-calculating your benefits will also have to have regard to whether an adjustment to the award of the ill-health enhancement is necessary as a result of the Secretary of State’s determination in this matter. His decision replaces the Appointed Person’s decision of 13 October 1997. 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 but you may refer the matter to the Pensions Ombudsman or to the High Court. Because of this officials may not discuss the case further.
6.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).
7. 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).
8. 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 Mrs XXX: letters dated 27 March (with enclosures) and 27 April 1998; and
b. from Mr XXX on behalf of the Appointed Person: letter dated 15 April 1998 with enclosure (copied to you under cover of the Department’s letter of 21 April 1998).
REGULATIONS CONSIDERED AND REASONS FOR DECISION
2. From the evidence submitted the following relevant points have been noted:
a. you joined the LGPS on 1 April 1985;
b. from 1 April 1985 to 31 August 1990 you worked 23 hours per week;
c. from 1 September 1990 to 31 March 1991 you worked 31 hours per week;
d. from 1 April 1991 to 30 April 1993 you worked 33 hours per week;
e. from 1 May 1993 to 31 October 1994 you worked 28 hours per week;
f. from 1 November 1994 to 31 December 1995 you worked 30 hours per week; and
g. from 1 January 1996 to 8 June 1997 you worked 33 hours per week; and
h. on 8 June 1997 you ceased employment due to ill-health and were awarded immediate payment of your LGPS benefits with ill-health enhancement.
3. The Secretary of State in reaching his decision has had regard to the regulations, which in his view, apply. In calculating your benefits two factors must first be determined. The first factor to be calculated is the total period of membership (regulation B14 of the 1995 regulations explains the periods which count). However, any service which is part-time is proportionately reduced to a period of whole-time service (regulation B15(2) of the 1995 regulations). The second factor is the pensionable remuneration to be used to calculate your benefits (regulations D1 and C2 of the 1995 regulations explain what a person’s remuneration consists of). The whole-time comparable remuneration is used in the case of part-time service (paragraph 7 of Schedule D1 of the 1995 regulations). The Secretary of State has therefore had to consider what your total period of membership and your pensionable remuneration is for the purpose of calculating your benefits.
4. You make the following points:-
a. your total years of membership of the LGPS is 20 years and 120 days;
b. you have worked various hours during this period equalling 65% under 30 hours per week and 35% over 30 hours per week; and
c. depending on whether it is actual service or proportionally reduced service it is normal to apply the actual part-time pay to actual full service or notional full pay to the reduced service.
5. The Appointed Person in reaching his decision determined whether your periods of service were whole-time or part-time. He concluded that the definition of whole-time service in the 1995 regulations placed you in a worse position than the benefits available to you under the 1986 regulations. Because of the saving provision in the 1995 regulations your benefits should be calculated using the 1986 regulations. He determined that as you had worked more than 30 hours per week during the final twelve months of employment (the period used in your case to determine your pensionable remuneration) this was whole-time and the council were therefore correct to use your actual salary.
6. The Secretary of State has considered whether your periods of service are whole-time or part-time. At the time you joined the LGPS the 1986 regulations were in force. In your case where you worked 30 hours or more per week you were whole-time. For the other periods you were part-time (schedule 1 of the 1986 regulations).
7. With effect from 2 May 1995 the 1995 regulations came into force and the definition of whole-time changed. From 2 May 1995 an employee was a whole-time employee if the hours worked were considered to be the whole-time hours for that job (regulation B3(3)(b)). Otherwise an employee was part-time. No reference has been made to variable-time as this does not apply in your case. There is no dispute that the hours you worked were less than the whole-time hours for that job.
8. The 1995 regulations provided saving provisions for periods of service up to 2 May 1995. Service which had been whole-time under the 1986 regulations counted as whole-time under the 1995 regulations by virtue of the saving provision in paragraph 10 of Schedule 4 of the 1995 regulations. This meant that periods of service which had been whole-time or part-time under the 1986 regulations counted as the same under the 1995 regulations. However with effect from 2 May, when the 1995 regulations came into force, your service counted as part-time by virtue of the changed definition of whole-time in the 1995 regulations. A further saving provision in the 1995 regulations meant that in calculating your benefits for the period 2 May to 31 December 1995 your service was treated as if you had been in continuous whole-time employment (paragraph 10(2) of Schedule M4 of the 1995 regulations). In calculating your benefits you are classed as whole-time up to the time your hours of employment changed, that is 31 December 1996. When you changed your hours of employment the saving provisions in the 1995 regulations no longer applied. For the purposes of the 1995 regulations your service was part-time and should have been accordingly been calculated as a proportion of the whole-time equivalent.
9. The Secretary of State therefore takes the view that your periods of service for the purpose of the 1995 regulations are as shown in the Appointed Person’s letter with the exception of the period 1 January 1996 to 8 June 1997. Under the 1995 regulations your service for this period was part-time and should have been shown as 1 year and 109 days. Because your service was part-time in calculating your benefits your pensionable remuneration is the whole-time comparable pay (paragraph 7 schedule D1).
10.The Secretary of State concludes that in calculating your LGPS benefits your total period of membership was 9 years and 252 days and the pensionable remuneration to be used was £13,233.
11. The Secretary of State notes that you do not disagree with the period of part-time equivalent period “buy-back” or the ill-health enhancement. However the fund will need to re-calculate your period of ill-health enhancement because of the change to part-time service for the period 1 January 1996 to 8 June 1997.