537      INDEX

 

LOCAL GOVERNMENT PENSION APPEAL

 

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)

 

 

1.                I refer to your letter received in the department on 11 November 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.

2.                The Appointed Person upheld the decision of the XXX (the council) to reduce your monthly local government pension scheme (LGPS) pension due to an error in its calculation.

3.                The Secretary of State’s jurisdiction 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 LGPS, which effectively means whether the LGPS regulations have been correctly applied in the circumstances.

4.                The question for decision: The question for decision by the Secretary of State is whether the council have correctly calculated your pensionable remuneration.

5.                The Secretary of State has considered all the representations and evidence.  Copies of documents supplied by the Appointed Person have been sent to you under cover of the department’s letter of 30 November 1998.

6.                Secretary of State’s decision: The Secretary of State has taken into account the appropriate regulations.  He finds that your pensionable remuneration was incorrectly calculated.  The correct pensionable remuneration, on the figures provided by the council is £20,598.32.  His decision replaces that made by the Appointed Person.  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 this decision.  He is acting judicially and has no power to modify the way the regulations apply to the facts of the case.  Having made his decision 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 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 you: letter received in the department on 11 December 1998 (with enclosures);

b)               from the Appointed Person: letter dated 23 November 1998 (with the enclosures listed in the department’s letter of 30 November); and

c)                from council: letter dated 3 February 1999.

REGULATIONS CONSIDERED AND REASONS FOR DECISION

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

a)                your date of birth is 14 September 1944;

b)               on 7 May 1990 you started employment with the council;

c)                on 27 September 1994 you were given unpaid leave to start a period of training;

d)               on 27 October 1994 you ceased paying contributions to the LGPS;

e)                on 1 May 1996 you returned to work with the council and were put back on their payroll;

f)                 on 26 May 1996 you took voluntary early retirement; and

g)               the council initially calculated your pension benefits on a pensionable remuneration of £20,435.61 but later reduced this to £19,820.86.

3.                You appealed to the Appointed Person because the council reduced your pension payments due to what they claimed were errors in the initial calculation.  The Appointed Person upheld the council’s decision.

4.                The Secretary of State in reaching his decision has had regard to the regulations which, in his view, apply.  A person’s pensionable remuneration is used to calculate their local government pension.  At the time your pension was awarded the regulation governing pensionable remuneration was regulation D1 of the 1995 regulations.  The effect of this is that your pensionable remuneration is your pay on which you paid contributions for what is called the “relevant period”.  Regulation D1(2) says that the relevant period is either the last year of membership of the LGPS, or another period as allowed under Schedule D1.  Schedule D1 applies in your case because for part of your last year of employment you were on unpaid leave, therefore you did not pay LGPS contributions and could not count this time as a period of membership.

5.                In considering whether the council have correctly calculated your pensionable remuneration, the Secretary of State has considered whether the relevant period they have adopted is correct.  He notes that in their letter of 3 February 1999 (copy enclosed) the council state that they have used paragraph 3 of Schedule D1 of the 1995 regulations to arrive at your pensionable remuneration for the relevant period.  They have calculated that your pensionable remuneration as follows:

 

6.      The Secretary of State notes that paragraph 3 of Schedule D1 of the 1995 regulations applies where a person is not entitled to count “the whole of the period” which would otherwise have been the relevant period (ie their final year ) because they have been absent from duty.  The Secretary of State notes, however, that you returned to work for the final 26 days of this period, and since the council have used those days in their calculations, he accepts that it was a period of membership.  You were not therefore in the position of being “not entitled” to count “the whole of the period” because you were entitled to count the last 26 days.

7.      Paragraph 1 of Schedule D1 of the 1995 regulations applies where a person is entitled to count only part of their final year as a period of membership.  This is the regulation that the council should have applied in your case.  This states that the pensionable remuneration must be calculated by multiplying the remuneration during that part by 365 days, and dividing the result by the number of days in that part.  From the figures provided by the council in their letter 3 February 1999 it would appear that your remuneration for the last 26 days was £1,467.32.  This gives a pensionable remuneration of £20,598.92.  The Secretary of State concludes that your benefits must be recalculated accordingly.  The council will need to consider the payment of interest under the terms of regulation H1.

8.      Although it does not affect this decision, the Secretary of State takes the view that the method of calculation set out above which follows that in paragraph 1 of Schedule D1 of the 1995 regulations should be adopted for all similar calculations, and that the method used by the council in their calculations under paragraph 3 of Schedule D1 was therefore incorrect.