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Our Ref: LGR 85/18/237 December 1999 |
LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)
OCCUPATIONAL PENSION SCHEMES (DISCLOSURE OF INFORMATION) REGULATIONS 1996 (the Disclosure regulations)
1. I refer to your undated appeal received by the department on 8 November 1999 (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 Council (the council).
2. Your appeal to the Appointed Person was on the following grounds. You became entitled to a death grant and spouse’s pension as a result of your wife’s death while an active member of the LGPS as an employee of the council. Your wife, in her last year of employment, changed her working hours to part-time from full-time on returning from sick leave. This reduced the level of death grant and spouse’s pension benefit entitlement. Your complaint was that your wife was not advised of the consequences to her pension when she changed her hours of work. You argued that had she known the effect on her entitlement, rather than return to work as a part-timer, she would have remained on sick leave. The Appointed Person found that the council had acted reasonably in that they had advised your wife to seek information that was available in the council’s LGPS guide, from the council’s pension officer and the LGPS authority’s offices.
3. The question for decision: It appears the disagreement you are asking the Secretary of State to consider is whether your wife was advised about the consequent reduction in death grant (“death in service”) as a result of reducing her hours of employment.
4. The Secretary of State has considered all the representations and evidence. Copies of documents supplied by the Appointed Person were sent to you under cover of the department’s letter of 2 December 1999.
5. The Secretary of State has taken into account the appropriate regulations. 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 provisions governing the LGPS have been correctly applied in the circumstances. Like the Appointed Person the Secretary of State has no powers to direct a local authority to act outside the provisions of the regulations.
6. There is no dispute that when your wife died the council awarded you a death grant under regulation 38 of the 1997 regulations, and a spouse’s pension under regulations 40 and 41. The level of these benefits was dependent on your wife’s pensionable pay in her last year of employment and accrued membership period in the LGPS. The reduction in her pensionable pay before she retired affected the level of death grant, because under regulation 38(3) and 21(4), the death grant is required to be calculated as twice her actual pay in part-time employment. The Disclosure regulations applied to the provision of information. There is a requirement under these regulations for certain information to be made available to members of an occupational pension scheme.
7. Secretary of State’s decision: In your appeal to the Secretary of State you do not dispute the way the regulations apply to your wife’s case; rather you argue that the council have not shown that they advised her of the consequences to her pension entitlements of returning to work on a part-time basis and you claim this to be maladministration. The Secretary of State notes that the Appointed Person considers that your wife was advised by her employer to seek information which would have been available from the scheme guide, the employees pension officer and the Pensions Office. He notes that it is not argued that she was given written advice, or any specific indication of the effect on her benefit entitlements that changes to her contractual hours and pay might have. The effect of regulation 5(4) and paragraph 4 of Schedule 2 of the Disclosure regulations is that your wife should have been informed in writing of the current amount of death in service benefits, but only if she requested this information. There is no evidence that she made such a request.
8. Notwithstanding the Appointed Person’s view that the council acted reasonably in advising your wife to seek information, the Secretary of State recognises that the consequence of your wife’s decision to return to work on a part-time basis was an unfortunate detrimental effect on the amount of death grant payable, and he accepts that the council may not have specifically made her aware of this. However, the Secretary of State takes the view that on the basis of the evidence available it is not possible to conclude that the council failed to meet the regulatory provisions on the provision of information. He takes the view that, in this case, key to the application of the 1997 death in service regulations was the decision of your wife to change the terms and conditions of her employment. Once this change had been made LGPS administrators did not have the discretion to alter the way the relevant 1997 regulations applied. Furthermore, if it were shown that the council failed to provide information about the LGPS or otherwise act reasonably and that this amounted to maladministration causing financial loss or injustice, the Secretary of State has no power to order redress or award compensation in the context of an appeal. The Secretary of State therefore has to dismiss your appeal.
9. The Secretary of State decision replaces that made by the Appointed Person, although it does not alter its effect. 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.
10. This completes the second stage of the internal dispute 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).
11. The Pensions Ombudsman may investigate and determine any complaint of maladministration or any 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).