501      INDEX

LOCAL GOVERNMENT PENSION APPEAL

 

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 3 September 1998 to the Home Secretary in which you appeal on behalf of Mr XXX against the decision of Mr XXX, the Appointed Person.  Your letter was passed to the Secretary of State for the Environment, Transport and the Regions as he has responsibility to, under regulation 102 of the 1997 regulations, decide questions on appeal relating to the local government pension scheme (LGPS).

2.                The Appointed Person upheld the decision of XXX County Council (XXX) to deduct money from Mr XXX’s retirement pension for the period he worked for XXX City Council (XXX).

3.                The question for decision: The question for decision by the Secretary of State is whether XXX have assessed Mr XXX’s annual rate of pensionable remuneration (pay) correctly during his re-employment as a pensioner for the purposes of calculating any reduction to his retirement pension.

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 28 September 1998.

5.                Secretary of State’s decision: The Secretary of State has taken into account the appropriate regulations.  He finds that XXX assessed Mr XXX’s annual rate of pensionable pay correctly during his re-employment as a pensioner for the purposes of calculating whether a reduction in his retirement pension was due.  He therefore dismisses your appeal.  His decision confirms that made by the Appointed Person.  The Secretary of State’s reasons and the regulations which he considers apply in Mr XXX’s 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 decision he has no power to alter it but Mr XXX 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 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 XXX on behalf of the Appointed Person: fax transmission dated 17 September and letters dated 18 (with the enclosures listed in the department’s letter of 28 September) and 21 October 1998 (with the enclosure sent to you with the department’s letters of 17 November); and

(b)            from you: letters dated 3 September and 13 October 1998.

REGULATIONS CONSIDERED AND REASONS FOR DECISION

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

(a)            on 25 September 1995 Mr XXX retired from LGPS employment;

(b)            when he ceased employment his annual rate of pay was £20,748;

(c)            on 29 September 1997 he was re-employed by XXX on an open ended temporary contract; and

(d)            his contract was terminated on 22 February 1998.

3.                You contend that XXX should have looked at Mr XXX’s actual earnings in his new employment to decide whether they breached the limit contained in the regulations of his indexed annual rate of earnings in his previous employment.

4.                The Secretary of State in reaching his decision has had regard to the regulations which, in his view, apply.  When Mr XXX started his employment with XXX, regulation D15 and Part I of Schedule D5 of the 1995 regulations applied to the question whether any reduction of his retirement pension was due.

5.                Under Schedule D5, Part I, paragraph 5(1), the annual rate of remuneration for fixed-rate emoluments (as opposed to fees) is defined in the case of the new employment as the annual rate on the first day of employment.  Therefore it is the annual rate of pay on the first day of Mr XXX’s new employment which had to be taken into account, not the actual amount earned in any one year.  Paragraph 2 of Schedule D5 requires the annual rate of retirement pension to be reduced “while the person holds the new employment”.  It does not specify that this period has to last a year or more for the reduction to apply.  In Mr XXX’s case the annual rate of pay on his first day was £20,313 not the £8,364.99 paid over the period of the contract.  For the period he worked for XXX Mr XXX’s local government pension must be reduced or suspended so that during that period he did not receive more than he was earning before retiring, subject to any increases made to his pension under the Pension (Increases) Act 1971.  Every period of re-employment must be treated in this way on the day each period begins.  Furthermore paragraph 6 of Schedule D5 requires that where a pensioner is in a period of re-employment and their contractual hours alter or they transfer to another post the same formula applies in that such events are treated as though they “again entered a new employment”.