Local Government Pension Scheme Appeal Determination By The Secretary of State

471 INDEX Our Ref: LGR 85/18/107

23 November 1998

LOCAL GOVERNMENT PENSION APPEAL

SUPPERANNUATION ACT 1972

LOCAL GOVERNMENT SUPERANNUATION SCHEME REGULATIONS 1986 (the 1986 regulations)

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 11 September 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 the XXX Pension Fund (THE FUND) on behalf of your employer not to repay your contributions for pre-1988 cover for widower’s pension.

3. The Secretary of State’s powers under regulations 102 and 103 of the 1997 regulations are to reconsider the original disagreement referred to the Appointed Person under regulation 100 and decide whether the local government pension scheme (LGPS) regulations have been correctly applied in the circumstances. Where the council have exercised a discretion, the Secretary of State’s role is not to overturn the decision but to ensure that the discretion has not been exercised unreasonably or improperly; where it has, he will determine that the matter should be reconsidered in a proper manner.

4. The question for determination: The question for determination by the Secretary of State is whether, under the 1997 regulations, your additional contributions paid for widower’s pension cover for pre-6 April 1988 membership can be refunded to you.

5. 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 25 September 1998.

6. Secretary of State’s determination: The Secretary of State has taken into account the appropriate regulations. He finds that the regulations do not provide for the contributions to be refunded to you. To that extent his decision confirms that of the Appointed Person. However, you will wish to know that it was open to your employer, XXX Council, to consider whether to provide alternative benefits in the form of augmentation of your LGPS membership. Since no evidence has been provided on this issue the Secretary of State cannot consider whether they have acted reasonably or properly, but you may wish to refer the matter back to them. The Secretary of State’s reasons for his decision and the legislative provisions which 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 legislative provisions apply 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.

7. 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. Their address is 11, Belgrave Road, London, SW1V 1RB (telephone number 0171 233 8080).

8. The Pensions Ombudsman may investigate and determine any complaint or dispute of fact or law in relation to theLGPS 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 21 September 1998 (with the enclosures listed in the department’s letter of 25 September 1998); and

(b) from you: letter dated 11 September 1998 (with enclosures).

REGULATIONS CONSIDERED AND REASONS FOR DECISION

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

(a) you are employed by XXX Metropolitan Borough Council and the relevant LGPS administering authority is [the Fund];

(b) since March 1993 you have been paying 0.54% of your salary to reckon an additional period of service for the purpose of calculating a widower’s long-term pension under LGPS regulations; and

(c) on 1 April 1998 these contributions ceased when the provisions of regulation E6(7) of the 1986 regulations and C13 of the 1995 regulations ceased to have effect under regulation 9 of the transitional regulations.

3. Your appeal to the Appointed Person was against the Fund’s refusal to refund the contributions you made under the “Options to Buy Back Scheme” for widower’s pension cover. The Appointed Person dismissed your appeal.

4. Regulation E6(7) of the 1986 regulations and regulation C13 of the 1995 regulations provided for a married woman who was an LGPS member before 6 April 1988 to pay for an additional period of service after 31 March 1972 and before 6 April 1988 to be used in calculating a widower’s long-term pension. This provision was stopped with effect from 1 April 1998 by regulation 9 of the transitional regulations. However, regulation 9(3) required your employing authority to resolve before 1 November 1998 that the period to which the election relates counts for widower’s pension.

5. The Secretary of State in reaching his decision has considered all the evidence and has had regard to the regulations which, in his view, apply. It is clear that the effect of regulation 9 of the transitional regulations is to cancel your election under the previous LGPS regulations for pre-1988 widower’s pension cover. It is not disputed that this cover will be honoured by your employer. Neither the transitional regulations nor the 1997 regulations specifically provide for the circumstances where a one-off payment or regular contributions have already been made for widower’s pension cover. The Secretary of State accepts therefore that the regulations do not require the Fund to return these payments to you.

6. However, the 1997 regulations (regulation 52) provide employing authorities with the facility to increase the total period of membership for employees leaving the scheme on or after their fiftieth birthday. It was open to employing authorities to consider awarding extra periods of membership to women who had paid contributions in respect of their pre-1988 service for widower’s benefit. Regard must be given to the maximum permitted membership period (40 years) and, consideration given as to the use of Inland Revenue limits which might allow a widow’s pension of more than 1/2 but no more than 2/3 of a member’s pension. Authorities were required under regulation 106 of the 1997 regulations to publish their policy on how they intended to operate this procedure. The Secretary of State has been given no evidence whether, irrespective of the views of the Fund, your employer has properly and reasonably considered how to use this discretion in relation to people in your position. You may wish therefore to refer this question back to your employer.