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05 November 1999 642 INDEX |
LOCAL GOVERNMENT PENSION SCHEME APPEAL
LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)
1) I refer to your letter of 25 August 1999 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, in relation to your local government pension scheme (LGPS) dispute with XXX (the Fund).
2) The Appointed Person noted that, in part, your complaint related to previous “Annual Benefits” statements issued, but none of these were formal determinations of your benefit entitlements as required under regulation 97 of the 1997 regulations. He found that the amounts of benefits actually awarded are your correct entitlements under the terms of the LGPS.
3) The question for decision: The question for decision by the Secretary of State is whether the Fund were required to pay your LGPS benefits in line with estimates provided by the Fund in the Annual Benefits Statements.
4) The Secretary of State’s decision: The Secretary of State has considered all the representations and evidence you submitted and has taken into account the appropriate regulations. He finds that the Appointed Person has acknowledged that all the Annual Benefits Statements issued to you up to February 1999 were incorrect, and that the replacement statement issued in February 1999 still contained an error in that the pay figure shown was far in excess of your actual level. The Secretary of State notes that as a result of errors your Annual Benefit statements showed higher levels of benefits than were correct. However, your benefits are required to be paid in line with the provisions in the LGPS regulations and not in line with incorrect figures on benefits statements. Like the Appointed Person, the Secretary of State has no powers to direct the Fund to act otherwise than in accordance with the rules governing the LGPS. Nor does the Secretary of State have powers to order redress or award compensation even where it is shown that maladministration has taken place causing financial loss or injustice.
5) The Secretary of State’s decision confirms that made by the Appointed Person. His reasons, and the regulatory provisions which he considers apply in your case, are set out in the annex to this letter, which forms an integral part of his decision. He is acting judicially and has no power to modify the way the regulatory provisions 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.
6) This completes the second stage of the internal dispute resolution procedures. 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 of maladministration or dispute of fact or law referred to him 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 the council’s Pension Manager.
1) The following evidence has been received and taken into account:
a) from you: letter dated 25 August 1999, with enclosures; and
b) from the Appointed Person: letter dated 8 September 1999.
2) From the evidence received the following relevant points have been noted;
a) you were a member of the LGPS;
b) Annual Benefit Statements were provided by the Fund from 1990; these showed a higher level of benefits than was correct;
c) the Fund issued you with a revised Annual Benefit Statement in February 1999;
d) you retired on 15 April 1999 and your LGPS benefits were paid immediately; and
e) due to an error in the revised Annual Benefit Statement your benefits were reduced.
3) You explain that the calculations affecting your retirement were based on information given that you would receive a lump sum on retirement of £11,666.84 and an annual pension of £3,888.95. You received a lump of £6,792.24 and an annual pension of £1,600. You further explain that having looked back through your papers you find a lot of misinformation, which you had acted in good faith on. You do not dispute that your benefits were calculated in accordance with the rules,
4) The Fund, in their letter of 26 February 1999 apologise for the errors in your previous statement and enclosed a revised Annual Benefits Statement. In their letter of 4 May 1999 they explain that their records still showed you as working part-time. As a result the computer calculated your salary incorrectly. This figure was much greater than the figure which should have been used and consequently all the amounts quoted in the statement were incorrect.
5) The Appointed Person found that all your Annual Benefit Statements were incorrect, but confirmed that the amounts of benefits actually awarded are your correct entitlement under the terms of the LGPS. He pointed out that the notes supplied with the Annual Statements specifically stated that service used was to 31 March 1998 only and that, in particular, due to the estimated nature of the document, it should not be relied upon in making any decision regarding your retirement benefits.
6) The Secretary of State has considered all the evidence and has had regard to the regulations which, in his view, apply. There are no provisions in the rules governing the LGPS requiring the Fund to issue annual benefit statements. These are required under the Occupational Pension Scheme (Disclosure of Information) Regulations 1996 in relation to money purchase scheme but not in relation to final salary schemes such as the LGPS. The Secretary of State notes that the Fund, in February 1999, acknowledged that the previous Annual Benefit Statement was incorrect and issued a revised one. The Fund also acknowledge that the revised statement was incorrect. The Secretary of State notes that you do not appear to have questioned the pay figure used in the revised statement, which was incorrect and showed a much greater figure. He further notes that you do not dispute that your benefits have been correctly calculated. Therefore he concludes that the Fund complied with the rules governing the LGPS. Like the Appointed Person, the Secretary of State cannot direct the Fund to act otherwise than in accordance with these rules. Nor does he have any powers to order redress or award compensation even where maladministration is shown to have taken place causing financial loss or injustice.