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)

 

I refer to your letter of 28 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.

1.                 The Appointed Person upheld the decision of XXX Council (the council) that the call out payments you received were for non-contractual overtime and therefore not pensionable.

2.                 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.  This regulation refers to a matter relating to the local government pension scheme (LGPS), which effectively means whether the LGPS regulations have been correctly applied in the circumstances.  There are no provisions to award compensation where claims are made that information has not been provided with regard to the LGPS.  Like the appointed person the Secretary of State has no powers to direct a local authority to act outside the provisions of the regulations.

3.                 The question for determination: The question for determination by the Secretary of State is whether the payments you received for call out duties were pensionable remuneration.

4.                 The Secretary of State has considered all the representations and evidence you have supplied in support of your appeal.

5.                 Secretary of State’s determination: The Secretary of State has taken into account the appropriate regulations.  He finds that your payments for call out duties were not pensionable remuneration.  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 regulations 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.

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.  Their 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 LGPSmade or referred in accordance with the Pensions Schemes Act 1993.  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 and to your pension manager.

EVIDENCE RECEIVED

1.                 The following evidence has been received and taken into account:

(a)              from the Appointed Person: letter dated 10 October (with the enclosures referred to in the department’s letter of 13 October 1998); and

(b)             from you: letters dated 28 September (with enclosures) and 15 October 1998.

REGULATIONS CONSIDERED AND REASONS FOR DECISION

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

(a)              in 1989 you commenced employment with the council;

(b)             with effect from 1 February 1990 your post as an inspector was changed to that of a building technician;

(c)             on 10 March 1993 you were appointed to a position with the same job title in the council’s Property Services division; and

(d)             call out duties were performed outside your normal hours of work and you received overtime payments for performing these duties.

3.                 The Secretary of State in reaching his decision has had regard to the regulations which, in his view, apply.  During the various changes to your working arrangements and terms and conditions with the council the 1986 regulations covered your pension arrangements.  Your pensionable pay is dependant upon what the regulations call “remuneration”.  Non-contractual overtime payments were specifically excluded from the definition of “remuneration”.  On 2 May 1995 the 1986 regulations were replaced by the 1995 regulations.  These regulations were in force when your retirement benefits were awarded.  The definition of pensionable remuneration, as far as it effects your case, was not changed.  Regulation D1 defined pensionable remuneration and regulation C2 gave the meaning of remuneration.  Regulation C2(2) excluded non-contractual overtime, and payments for such overtime were therefore not liable to deductions towards pension.  “Contractual” overtime payments, on the other hand, would form part of remuneration, be liable for deductions, and count towards benefits.  These regulations were in force when your retirement benefits were awarded.  The Secretary of State has therefore had to decide whether your overtime payments were contractual or non-contractual.

4.                 For your appeal to be allowed you have to show that the overtime payments you received were contractual.  You have argued that your call out duties were contractual because they were key to the council’s work of containing damage to buildings, that it was unacceptable to refuse a call-out as it was an emergency system, that although it was unknown for disciplinary action to be taken against anyone who refused the work it was also unknown for any supervisor (who undertook stand by work as contractual overtime and with whom you worked closely) to be disciplined.  You also maintain that you were never informed of the contractual nature of the work.

5.                 The council have argued that call out, unlike stand by duties, were not contractual as they were not obligatory in that individuals were not nominated to carry out the duties and they were arranged on an ad hoc basis.

6.                 The Secretary of State takes the view that for the purposes of the 1995 regulations contractual overtime is work which is required under the terms of or to fulfil a person’s contract of employment and which is performed outside normal hours of employment, that is where failure or refusal to carry out the work would result in a breach of contract which could result in disciplinary action being taken.  The Secretary of State has noted all your contentions.  He notes that although call out duties were regularly performed outside your normal hours the council did not consider the duties contractual and on the same terms as standby duties which they did consider to be contractual overtime.  They have stated that you would not have been liable to disciplinary action if you refused to carry out the work.  While the Secretary of State notes that you dispute some of the council’s contentions he does not consider that on the evidence available you have convincingly demonstrated that you would have been liable to be disciplined for breach of contract if you had refused the call out duties, even though you consider you were expected to perform these duties and that the duties were important to the council’s work.

7.                 The Secretary of State notes that you have provided pay statements showing, among other details, basic pay, overtime payments, and pension contributions.  He does not consider that these of themselves prove whether the overtime was contractual.  They do indicate that pension contributions were not paid on overtime payments, which demonstrates that the council have treated the overtime as non contractual.  The Secretary of State notes that you consider that the council did not make you aware that call out duties were non-contractual and would then not count towards your pension.  However, the 1986 or 1995 regulations did not specifically require this, and there is no evidence that the council have failed to provide such information as the regulations do require.  Your claim that information has not been provided cannot therefore be considered in the context of your appeal.

8.                 On balance the Secretary of State takes the view that the overtime payments in question were not contractual and were therefore excluded from the definition of remuneration for the purposes of the 1995 regulations and the 1986 regulations.  He therefore dismisses the appeal.