621 INDEX 1 October 1999
Our Ref: LGR 85/18/208
SUPERANNUATION ACT 1972
LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)
1. I refer to your letter of 19 July 1999 in which you appeal (under regulation 102 of the 1997 regulations) against the decision of Mr XXX, the Appointed Person in relation to your local government pension scheme (LGPS) dispute with XXX (the council).
2. The Appointed Person decided that the payments you received for election duties could not be included for benefits under the LGPS. You contend that the payments are pensionable. You also point out that the Appointed Person was the Returning Officer during the period in question.
3. The Secretary of State is empowered under regulations 102 and 103 to reconsider the original disagreement referred to the Appointed Person under regulation 100. This regulation refers to a matter relating to the Scheme, which effectively means whether the provisions governing the LGPS have been properly applied and complied with.
4. The Question for decision: Although the substantive question which you have asked the Secretary of State to decide is whether the payments you received in respect of electoral duties are pensionable, he takes the view that he must first consider whether the council’s initial decision and the first stage of the appeals process have been properly carried out in accordance with the regulations.
5. Points taken into account: The Secretary of State has taken into account your letters of 19 July and 7, 11 and 29 August 1999, and the letters from the council’s pension manager, Mr XXX, dated 30 July, 13 and 23 August and 13 September 1999. From these he has noted the following points:
a) On 30 April 1999 the Chief Executive and Director of Finance, who was also the Returning Officer, wrote to you referring by name to an earlier LGPS appeal case in a different authority, and saying “it would be difficult to substantiate any other conclusion than the fact that election fees should be included as pensionable remuneration”.
b) 5 May 1999 you wrote to the pensions manager, referring to his oral decision to exclude election duties payments from the calculation of your retirement benefits. You asked this to be treated as an appeal to the Appointed Person.
c) On 12 May 1999 the pensions manager told you that you must write direct to the Appointed Person.
d) The Appointed Person was the council’s Chief Executive and Director of Finance.
e) On 12 May 1999 you wrote to the Appointed Person asking him to determine your appeal.
f) On 18 May 1999 the Appointed Person wrote to you turning down your appeal.
6. Regulations considered: The Secretary of State has considered the regulations governing decisions and appeals. Regulation 97 requires employing or administering authorities as appropriate to decide questions about a person’s rights under the Scheme in the first instance. Regulation 98(1) requires that the decision must be notified in writing and regulation 98(2) requires that any decision that a person is not entitled to a benefit must include the grounds for the decision. Regulations 99 to 105 deal with resolution of disputes. Regulation 99 provides for the appointment of Appointed Persons. Regulation 99(4) states that an application must not be referred to a person who has previously been involved in the subject matter of the disagreement.
7. Secretary of State’s views: This case raises a number of issues which the Secretary of State notes with considerable concern. He takes the view that the effect of regulations 97 and 98 in your case was that the council had to decide whether payments for election duties were pensionable and notify you in writing. Since this decision would affect your benefits, the Secretary of State would also have expected the council to have stated their grounds if they decided that the payments were not pensionable. It appears from your memo of 5 May 1999 that the Pensions Manager had provided calculations of your pension. However, no evidence has been provided that he wrote giving a decision on the specific question whether payments for election duties were pensionable, nor any grounds for deciding that they were not. This same memo refers to his “oral” decision on the matter. The Secretary of State concludes that the council failed to notify you in writing and provided no evidence to show that they had taken a reasonable decision. In his view they were in breach of their duties under regulations 97 and 98 and neither acted properly nor demonstrated reasonableness in reaching their decision at that time.
8. It is noted that during the course of your appeal to the Secretary of State, the council have now provided (albeit not direct to you) written reasons in evidence to support their case that your payments for election duties were not pensionable.
9. The Secretary of State has next considered the referral of the matter to the Appointed Person. He notes that the Appointed Person was the Returning Officer, and therefore the officer to whom you were directly responsible in relation to the duties for which the status of the payments is disputed. Furthermore, the Appointed Person had already written to you, before the disagreement was formally referred to him, stating a view on the pensionability of election fees, in response to a note you had put to him. The Secretary of State concludes that the Appointed Person had clearly previously been involved in the subject matter of the disagreement and his independence was compromised. In his view referral to this Appointed Person was a clear breach of regulation 99(4). The first stage of the disputes resolution procedure has therefore been conducted improperly.
10. The Secretary of State also notes that reference has been made to another appeal case in a different authority where the appellant has been named. The Secretary of State is unclear how this case came to the attention of you or the Appointed Person. No evidence has been provided to indicate that the appellant gave approval to his case being considered. The Secretary of State would emphasise that each case must be considered on its merits in the light of its individual circumstances; consideration of other cases may be inappropriate and not relevant in reaching a decision since circumstances are unlikely be identical in each case. Moreover, public discussion of cases relating to a named individual’s personal circumstances breaches fundamental principles of confidentiality and privacy unless it is clearly shown that it is done with the express consent of the individual concerned.
11. Secretary of State’s decision: The Secretary of State concludes that:
a) no evidence has been provided to show that in taking their initial decision, the council acted reasonably;
b) both the initial decision and the first stage of the disputes resolution procedure were carried out improperly and contravened the relevant regulations.
12. The Secretary of State has considered whether, in the light of the council’s apparent failures when they took their initial decision, he should remit the matter back to them to reconsider in a proper and reasonable manner. However, since their subsequent evidence sets out the reasons for their decision, and the basis of the disagreement is clear, he has concluded that this would serve no useful purpose. However, the Secretary of State does consider that the seriously flawed conduct of the first stage of the disputes resolution procedure, with its clear contravention of regulation 99, invalidates that process and the Appointed Person’s decision. In the Secretary of State’s view the substantive question does not arise to be considered by him until the first stage of the procedure under regulations 99 to 101 has been properly conducted, and if a disagreement then remains. He has therefore decided to remit the matter back to the council for them to put to a properly appointed Appointed Person to resolve. His decision replaces that of the Appointed Person.
13. I am required to draw your attention to the Pensions Advisory Service (OPAS) which is available to assist members and beneficiaries in connection with difficulties which they have failed to resolve. Their telephone number is 0171 233 8080. The Pensions Ombudsman may investigate and determine any allegation of maladministration or any complaint of fact or law in relation to the LGPS made or referred to him in accordance with the Pensions Schemes Act 1993. His telephone number is 0171 834 9144. He will not, however, investigate any matter until both stages of the internal disputes resolution procedure have been completed. The address of both these organisations is 11 Belgrave Road, London, SW1V 1RB.
14. Copies of this letter has been sent to your Pensions Manager and to the Chief Executive, who is asked to forward a copy to the Appointed Person who it is noted has now left the council’s employment. The Chief Executive is now also required to arrange for your case to be considered by a new, independent, Appointed Person.