699 INDEX
SUPERANNUATION 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 dated 5 August 1999 in which you appeal (under regulation 102 of the 1997 regulations) against the decision of Mr XXX, the Appointed Person for XXX Council, in relation to your local government pension scheme (LGPS) dispute with XXX University (the university).
2. The Appointed Person, in his decision dated 1 March 1999, concluded that the university were still pursuing the question of early release of your deferred LGPS benefits on the grounds of ill-health. He also decided that he had no power to award compensation for any loss due to maladministration, but he gave his opinion that there appeared to have been a lack of communication between the university and occupational health with neither body accepting responsibility for processing your case.
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. This regulation refers to a matter relating to the LGPS, which effectively means whether the statutory provisions governing the LGPS have been correctly applied in the circumstances. The disagreement you referred to the Appointed Person was whether the university should have granted you early release of your deferred LGPS benefits. You specifically referred to compassionate grounds, including ill-health. You also complained of incompetence on the part of the university in dealing with your case. In your appeal to the Secretary of State you clarified that your appeal was on the basis of the council’s refusal to release your benefits on compassionate grounds, and maladministration in respect of the length of time the university were taking to reach a decision on your ill-health case.
4. Whether or not to release benefits on compassionate grounds is a matter for the university’s discretion. The Secretary of State will not under the 1997 regulations overturn a decision where the university have exercised a discretion. His role is, rather, to ensure that the discretion has not been exercised unreasonably, improperly and, in cases where it has, to determine that the matter should be reconsidered in a proper manner. The Secretary of State has no powers to direct the university to act outside the provisions of the regulations.
5. The question for decision: The question for decision by the Secretary of State is whether the university acted unreasonably or improperly in deciding not to pay your deferred LGPS benefits early on compassionate grounds, and whether maladministration has occurred leading to financial loss or injustice.
6. Secretary of State’s decision: The Secretary of State has considered all the representations and evidence, and has taken into account the appropriate regulations. He finds that the university did not act properly in considering whether to release your benefits on compassionate grounds, in that they have not shown how they arrived at their decision. The Secretary of State therefore determines that the university should reconsider the matter and let you have their decision in a proper manner. His decision does not require the university to come to a different decision, if, on a proper reconsideration and explanation of the issues, they conclude that payment of your pension on compassionate grounds is not justified.
7. Turning to the question of maladministration, the Secretary of State notes that there was a period between 28 May 1998 and 22 January 1999 when it appears you were given no advice about the progress of your claim for early release of benefits on ill-health grounds. The Secretary of State considers the university should have done more to progress matters and to keep you informed during this period. However, the Secretary of State has no power to order redress or award compensation even where maladministration is shown to have led to financial loss or injustice.
8. The Secretary of State’s decision replaces that made by the Appointed Person. The Secretary of State’s reasons and the regulations which he considers apply in this case are set out in the annex to this letter, which forms an integral part of the 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 and his officials cannot discuss the case further. The decision is binding and can only be overturned by a judgement of the High Court or the Pensions Ombudsman.
9. 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 0207 233 8080).
10. The Pensions Ombudsman may investigate and determine any complaint of maladministration or any dispute of fact or law in relation to the local government pension scheme. His address is 11 Belgrave Road, London, SW1V 1RB (telephone number 0207 834 9144).
1. The following evidence has been received and taken into account:
a) from you: letters dated 5 August (with enclosures), 11 August (with enclosures), 1 October, 2 November, and 13 December 1999 (with enclosure);
b) from the Appointed Person: documents considered by him (list enclosed in the Department's letter dated 9 September 1999), and letter dated 21 September 1999 (with enclosures);
c) from the XXX Council Employee Services: copy of Dr XXX’s letter dated 14 October 1999;
d) from the XXX Fund: copy of Dr XXX’s letter dated 9 December 1999; and
e) from the university: copy of your letter dated 14 January 1998 (copy enclosed).
REGULATIONS CONSIDERED AND REASONS FOR DECISION
2. From the evidence submitted the following points have been noted:
a) your date of birth is 28 November 1946;
b) you were employed by the university and you were a member of the LGPS;
c) you ceased employment with the university on 7 May 1989;
d) on 14 January 1998 you wrote to the university requesting early release of your deferred LGPS benefits on compassionate grounds; and
e) on 1 April 1998 the university informed you that, in their opinion, “compassionate grounds” did not include the nature of your current circumstances.
3. You maintain that the university have refused to consider making a decision regarding your application for early release of your deferred LGPS benefits on compassionate grounds. You consider there is a case for maladministration with respect to the length of time since you first applied for your deferred benefits. You also consider that the Appointed Person has not issued a definite decision.
4. The Secretary of State notes that your original application to the council does not specifically refer to the early release of your deferred LGPS benefits on either compassionate or ill-health grounds. Whilst he acknowledges that both the university and the Appointed Person have referred to the early release of your LGPS benefits on ill-health grounds, the specific question that you referred to both him and the Appointed Person concerned the early release of your deferred benefits on compassionate grounds. At the time of your appeal, the university had still to make a decision on the “ill-health” question. The Secretary of State has not therefore considered any of the medical representations or evidence submitted or addressed the question of whether you are entitled to early release of your deferred LGPS benefits on ill-health grounds. He notes, however, that medical opinion has been provided by Dr XXX, and he would therefore expect the university to issue a formal decision in due course. The issues that the Secretary of State has to resolve therefore are whether the university have acted unreasonably or improperly in deciding not to pay your deferred LGPS benefits early on compassionate grounds, and whether there has been maladministration.
5. The Secretary of State in reaching his decision has had regard to the regulations, which, in his view, apply. At the time you applied to the university for early release of your deferred LGPS benefits the 1995 regulations had superseded the 1986 regulations. Regulation D11(2)(c) of the 1995 regulations gave an employing authority the discretion to bring into payment early on compassionate grounds at any time following the member’s 50th birthday.
6. The Secretary of State notes that in his letter of 1 March 1999, the Appointed Person considered and determined whether your deferred LGPS benefits should be awarded early on the grounds of ill-health. He also considered whether the delay in processing your original application constituted maladministration. He concluded that “The current situation is that Dr XXX is awaiting a specialist report from a consultant psychiatrist … Hopefully, a report from this consultant will enable Dr XXX to determine your eligibility for premature payment of your preserved benefits.”. He also stated “I must point out that neither myself … or the Secretary of State has the power to award compensation for any loss you have suffered.”. You wrote to the Appointed Person on 17 June 1999 stating that you had originally requested early payment of your deferred LGPS benefits on compassionate grounds. The Appointed Person then wrote to you on 29 June 1999 stating “With regard to your formal application for early payment of benefits on compassionate grounds, Regulation 31(5) affords discretion to the former employing authority. However the term “compassionate” is not defined in the Regulations and I am advised by the Pensions Administration Division that it is not normal practice to consider financial hardship alone when determining whether benefits are to be paid on compassionate grounds … I conclude therefore that the University feel that premature payment due to ill-health is more appropriate in your case.”.
7. The Secretary of State is concerned to note that the Appointed Person does not appear to have fully considered the specific question referred to him under regulation 100. The matter that you referred to him concerned the university’s decision not to grant you early release of your deferred LGPS benefits on compassionate grounds, not on grounds of ill-health. As such, the question the Appointed Person had to consider was whether the university had acted unreasonably or improperly in deciding not to pay your LGPS benefits early. Whilst the Secretary of State notes that the Appointed Person did refer to early release on compassionate grounds in his letter dated 29 June 1999, he is not satisfied that the Appointed Person has properly and fully considered the specific question. However, the Secretary of State is satisfied that the Appointed Person’s letters of 1 March and 29 June 1999 constitute a formal decision.
8. The Secretary of State notes that on 1 April 1998 the university wrote to you stating “… unfortunately, the “compassionate grounds” on which pension benefits can be paid early do not include the nature of your current circumstances.”. Whilst he is satisfied that this constitutes a formal decision on the part of the university, he notes that no reasoning behind the decision was given, nor was there any indication as to what relevant facts were considered by the university in reaching their decision. He does not consider therefore that the university have demonstrated that their decision was properly considered and properly explained to you. He does not consider that their decision was necessarily unreasonable nor that they should necessarily change it, but he concludes that they must reconsider your case and demonstrate that they have done so in a proper manner.
9. The Secretary of State notes that you also consider the length of time taken by the university in dealing with your application for early release of your deferred LGPS benefits constitutes maladministration. The Secretary of State notes that a significant period of time elapsed between 28 May 1998 when the occupational health unit (OHU) requested more details from you, and 22 January 1999 when the OHU wrote again to explain that a report from your current GP was required. It appears to the Secretary of State, from the papers submitted to him, that there is no evidence that the university enquired about or informed you of progress with your claim during this period; on the face of it, further information was only forthcoming following your appeal. The Secretary of State accepts that the OHU were trying to obtain medical reports during this period but he considers the university should have taken more action to keep you informed. However, the Secretary of State has no powers to order redress or award compensation even where it is shown that maladministration has taken place leading to financial loss or injustice.