LOCAL GOVERNMENT PENSION APPEAL

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT SUPERANNUATION REGULATIONS 1986 (the 1986 regulations)

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1995 (the 1995 regulations)

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)

1.                  I refer to your letter of 28 November 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 Council (the council).

2.                  The Appointed Person upheld the council’s decision not to backdate your membership of the LGPS to when you became a full-time employee with the council.  You maintain that when you first enquired about joining the local government superannuation scheme (the LGSS, now called the LGPS) you were misinformed about your eligibility.

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 provisions governing the LGPS have been correctly applied in the circumstances.  There are no provisions to award compensation where it is shown that misleading advice has been given or that information has not been provided with regard to the LGPS.  Like the Appointed Person the Secretary of State has no powers to direct a local authority to act outside the provisions of the regulations.

4.                  The question for decision: The question for decision by the Secretary of State is whether you are entitled to membership of the LGPS from when you commenced full-time employment on 20 November 1989.

5.                  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 13 January 2000.

6.                  Secretary of State’s decision: The Secretary of State has taken into account the appropriate regulations.  He finds that you cannot be given backdated membership, because you had a personal pension.  However, he is not satisfied that the council properly informed you about your eligibility to join the LGPS.  However, he has no power to award compensation even where it is shown that maladministration has occurred leading to financial loss or injustice, and he is unable to award any redress in your case.  His decision replaces that made by the Appointed Person.  The Secretary of State’s reasons and the regulatory provisions which he considers apply in yourcase 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 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.

7.                  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 020 7233 8080).

8.                  The Pensions Ombudsman may investigate and determine any complaint of maladministrationor any dispute of fact or law in relation to the LGPS made or referred in accordance with the Pension Schemes Act 1993.  His address is 11 Belgrave Road, London, SW1V 1RB (telephone number 020 7834 9144).

EVIDENCE RECEIVED

1.                  The following evidence has been received and taken into account:

(a)               from you: letters dated 28 November and 16 January 2000 (with enclosures); and

(b)               from the Appointed Person: list of documents copied to you with the enclosures in the Department’s letter of 13 January 2000.

REGULATIONS CONSIDERED AND REASONS FOR DECISION

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

(a)               your date of birth is 10 April 1941;

(b)               you were employed by the council from November 1974, initially on a part-time basis and not as a member of the LGPS;

(c)               on 15 June 1988 the council passed a resolution that employees who had elected not to join the LGSS or who had already opted to leave would not be readmitted if they were aged 50 or over, but had been under fifty when they commenced pensionable employment;

(d)               on 20 November 1989 you commenced full-time employment with the council;

(e)               on 19 March 1993 and on 4 and 17 September 1995 you completed option forms declining to join the LGPS; and

(f)                 in 1997 you joined the LGPS.

3.                  You maintain that after you became a full-time employee with the council and after waiting to hear from them about joining the LGSS you contacted the council (some time in 1990).  You claim you were advised that you should have applied immediately and that it was too late to join.  Your explanation for this is that you told your contact that your age was 50 as you were approaching this age and you were unaware that this may have been important to your entry into the LGSS.  The council contend that on 8 January 1990 they sent you an LGSS information booklet and option form to your home address but as you did not reply they deemed that you did not wish to join the Scheme.  They say they have no record of your contact with their officers, but the advice would have been correct if your were age 50 or over.  You contend you did not receive the booklet and option form in 1990, and opted not to join in 1993 and 1995 on the basis of the earlier advice that it was too late.

4.                  The Appointed Person found that as you opted not to join the LGPS in 1993 and 1995 it was unlikely that, had you received an application form when you first became eligible, you would have elected to join.

5.                  The Secretary of State in reaching his decision has had regard to the regulations which, in his view, apply.  When you first became eligible to join the Scheme the 1986 regulations provided for membership of the LGSS.  Local government employees with personal pensions were excluded from the LGSS under regulation B1(17)(g).  Membership was compulsory until 6 April 1988 when amendments required eligible employees to make a positive election in writing to join the LGSS (regulation B1A).  A local authority had the discretion to refuse membership to anyone having attained the age of 50 on entry (regulation B1A(4)) who had previously opted out or chose not to join.  The council were required to make a decision on your eligibility to join the LGSS when you started full-time employment under regulation N2 and to notify you of their decision under regulation N7.  In the main these provisions continued to apply when on 2 May 1995 the 1995 regulations replaced the 1986 regulations.

6.                  The Secretary of State has considered all the evidence.  It is not disputed that the council passed a resolution exercising their discretion under regulation B1A not to permit entry into the LGSS to employees 50 and over who previously either left or gave notice that they did not wish to join the LGSS.  However, it is not disputed that you were first entitled to join the LGSS when you became a full-time employee of the council on 20 November 1989 and that you had not previously opted out of the LGSS or refused to join.  Your were also under 50 at that date.  The council’s resolution did not therefore affect you at the time.  You elected not to join in 1993 and 1995 but made a written election to join in 1997.  It is not clear why the council waived the conditions of their resolution to permit you to join or whether the resolution still applied but it appears you gave up your private pension to gain access to the LGPS.

7.                  The Secretary of State in reaching his decision has had to consider whether the council were required under the rules governing the LGPS to inform you of your right to elect to join the LGSS when you became a full-time employee, whether there is sufficient evidence from which it would be reasonable to conclude that you were not so informed and, if so, whether you would have joined if you had been informed.  The Secretary of State takes the view that the Occupational Pensions Scheme (Disclosure of Information) Regulations 1986, to which the LGSS was subject, required your employer to inform you when you became eligible to elect to join.  Part N of the 1986 regulations clearly required the council to decide on your pensionable status and inform you of their decision when you entered full-time employment.  The Secretary of State notes that the council have not provided copies of the forms sent to you.  He notes that they have shown on a copy of a checklist of tasks, completed for you as a council employee entering full-time employment, that they sent you an “option form” plus literature to your home address on 8 January 1990.

8.                  The Secretary of State accepts that it cannot now be proved conclusively whether or not you received information about your right to join the LGSS in 1989 or 1990.  The Secretary of State’s is concerned to note that the council took no action when the option form which they maintain they sent to you on 8 January 1990 was not returned.  You have not indicated or provided evidence as to why you might not have received the information.  In the Secretary of State’s view, by sending only one letter and taking no follow-up action, the council did insufficient to ensure you were properly informed.  They should not, therefore, have deemed you had elected not to join when you made no response.  Having done so, they compounded the inadequacy of their action by failing to inform you, as required by regulation N7, of their decision.  Also shown is the council’s rule excluding from membership employees over the age of 50 who “elected not to join and are not over the age of 50” and the form further excludes any “Personal Pension holders”.  The Secretary of State notes your contention that because of advice you received in 1990 you felt you were excluded from joining the LGPS.  He also notes your contention that your subsequent actions (to decline membership in 1993 and 1995) were influenced by misleading advice the council gave you.  He accepts that it cannot now he proved whether or what advice the council gave you.

9.                  It is not clear to the Secretary of State when you took out your personal pension.  In your appeal to the Appointed Person you say you “had a small personal pension which I upped, and left it like this.”  The Secretary of State concludes that either before, when or after you became entitled to join the LGPS you took out a personal pension and then increased it.  He is satisfied from this that you were concerned to make pension provision for yourself, but this does not necessarily prove you would have joined the LGPS.  It is at least a reasonable possibility that you took out a personal pension, or retained and increased it, because you believed you could not belong to the LGPS.  On the other hand, it could be the case that you decided not to join the LGPS because you had your own personal pension provision.  The evidence available does not convincingly and conclusively prove which premiss is the right one.  The Secretary of State recognises that tax rules do not allow you to have two pensions in relation to one employment; you could not therefore both have a personal pension and be a member of the LGPS.

10.              On balance, the Secretary of State concludes that –

(a)               the council were required to inform you of your eligibility to join the LGPS from 20 November 1989, give you the right to elect to join, and inform you of their decision;

(b)               the steps the council say they took in January 1990 to inform you of your right and to give you the option to join were inadequate and they failed to inform you of their decision that you were deemed not to have elected to join; and

(c)               there is a reasonable possibility that, if you had been properly informed, you would have elected to join, given that at some point you made personal pension provision; and that you may have been misled – albeit unwittingly – into believing you were ineligible on age grounds which may have influenced your subsequent elections not to join.

11.              Although you were eligible to join the LGPS on 20 November 1989, and the Secretary of State accepts it is a reasonable possibility you may have elected to have done so if the council had done more to ensure you were aware of your right, the Secretary of State cannot give you backdated membership, because you had taken out a personal pension for at least part of the period between then and 1997 when you joined the LGPS.  He is therefore unable to order redress within the rules of the LGPS.  Nor does he have the power to award compensation where it is shown that incorrect information has been given with regard to the LGPS or where it is show that maladministration has taken place leading to financial loss or injustice.