460 INDEX
SUPPERANNUATION ACT 1972
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 28 August 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 XXX, the Appointed Person.
2. The Appointed Person upheld the decision of XXX City Council (the council) to recover some of your pension entitlement under regulation L17 of the 1995 regulations.
3. The question for determination: The question for determination by the Secretary of State is whether the council have acted properly and reasonably in seeking recovery of your pension under regulation L17 of the 1995 regulations.
4. The Secretary of State has considered all the representations and evidence. Copies of all documents supplied by the Appointed Person have been sent to you under cover of the department’s letter of 16 September 1998.
5. Secretary of State’s determination: The Secretary of State having taken into account the appropriate regulations finds that the council have acted properly under regulation L17 of the 1995 regulations in undertaking the recovery of your pension and that this decision is not unreasonable. His decision confirms that made by the Appointed Person. The Secretary of State’s reasons and the regulationswhich he considers apply in your case are set out in the annex to this letter, which forms an integral part of this determination. He is acting judicially and has no power to modify the way the regulationsapply 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 the Secretary of State’s officials cannot discuss the case further.
6. This completes the second stage of the internal disputes resolution procedure. The Pensions Advisory Service (OPAS) is available to assist members and beneficiaries in connection with difficulties which they have failed to resolve. The 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 (LGPS)made or referred in accordance with the Pensions Schemes Act 1993. 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 the Appointed Person: letter dated 11 September 1998 (with the enclosures listed in the department’s letter of 16 September 1998);
b) from you: letters dated 28 August, 1 and 26 September 1998 (with enclosures); and
c) from the council: letter dated 12 November 1998 (copy enclosed).
REGULATIONS CONSIDERED AND REASONS FOR DECISION
2. From the evidence submitted the following relevant points have been noted:
a) on 31 October 1996 you were dismissed by the council for fraudulently obtaining £247,960.97 from them;
b) on 14 March 1997 you were sentenced to three and a half years imprisonment;
c) on 30 September 1997 the council wrote informing you that they were seeking recovery of £126,751.04 from your preserved pension under regulation L17(4) of 1995 regulations;
d) on 19 May 1998 you wrote to the council disputing the amount the council stated was fraudulently obtained (monetary obligation); and
e) on 27 October 1998 the council issued a writ to recover the money.
3. In your appeal to the Appointed Person you made five points about the council’s action as detailed in their letter of 30 September 1997:
a) that you resigned on 29 October 1996 rather than being dismissed by the council on 31 October;
b) that you considered the monetary obligation of £247,960.97 quoted in the letter did not include money returned;
c) that if it had been known when you were sentenced, that the council were to take this action, you could have used it to argue mitigation of your prison sentence;
d) that during the summing up of the court case the prosecution said that there were no orders to be made therefore you took this to include restitution orders;
e) that your wife and your dependants would suffer as a result, and your wife, who assisted you in making additional contributions to your pension, would be indirectly penalised.
4. The Appointed Person found that the council had applied the 1995 regulations properly and had exercised their discretion reasonably.
5. In your appeal to the Secretary of State you contend that the council’s letter of 30 September 1997 contained errors and therefore was not legal. You point out that you did not receive a decision from the Appointed Person within the required two-month time limit. You believe that the council are persecuting you in the pursuit of their action and that, considering what you have already suffered, the punishment will be excessive.
6. The Secretary of State in reaching his decision must only have regard to the regulations which apply. In this case he must consider whether the council have applied regulation L17 of the 1995 regulations correctly and whether their decision to seek recovery was unreasonable. Regulation L17(1) gives discretionary power to the council to recover a money obligation of an ex-employee who ceased employment as a result of a criminal or fraudulent act in connection with their employment. They may obtain the money from the ex-employees pension fund entitlements (regulation L17(2)). In doing so they cannot deprive the ex-employee of their guaranteed minimum pension (GMP) and the possible GMP to a surviving spouse (regulation L17(3)). They must give three months notice of recovery and show the effect it would have on the ex-employees benefits (regulation L17(4)). And under regulation L17(5), if there is any dispute, the council cannot recover the money until they have obtained a court order or the award of an arbitrator.
7. Regulation L17 of the 1995 regulations applies to you by virtue of regulation L17(1) as you ceased employment with the council because you fraudulently obtained money from them while in their employment. Thus the council were entitled to exercise their discretion under regulation L17(2) and obtain money from your pension fund to which you had preserved rights. Attached to their letter of 30 September 1997 the council explained how they arrived at the amount they wished to recover. The calculations showed that you and any surviving spouse would still be entitled to a GMP as required by regulation L17(3). The council have complied with the three month notice period required in regulation L17(4)(a) as they have not yet recovered the sum notified in their letter of 30 September 1997. The council have shown in an attachment to this letter:
a) the amount they wish to recover;
b) how the amount was calculated; and
c) the effect on your preserved benefits of the recovery;
in line with regulation L17(4)(b). The Secretary of State does not consider that in this case the omission of a signature, although careless, invalidates the notification letter. Lastly the Secretary of State notes that the council are attempting to enforce recovery of the money through a court order as provided by regulation L17(5). The Secretary of State concludes that the council have acted properly in applying the terms of regulation L17.
8. The Secretary of State further notes that the council, in exercising their discretion whether to apply regulation L17, have taken into account the seriousness and long-term nature of the offences, their fiduciary duties, and the amount of pension that will remain available to you and any eventual widow. He considers these to be relevant factors and his view is that the council’s decision is not one no reasonable person could have taken.
9. He therefore dismisses the appeal.