706 INDEX
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 December 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. Your dispute was about your entitlement to membership of the LGPS from when you commenced employment with the council on 4 January 1994 to when your membership commenced on 2 May 1995, and whether the council should cover the cost of your LGPS contributions for this period. The Appointed Person found that the council do not have to meet the cost of your contributions for the period. In your appeal to the Secretary of State you maintain that the council has not formally offered to reinstate this period of pensionable employment.
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 claims are made 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 questions for decision by the Secretary of State are whether you were entitled to membership of the LGPS (formerly the LGSS) from when you commenced employment with the council on 4 January 1994, and whether the council should meet the cost of your contributions.
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 21 January 1999.
6. Secretary of State’s decision: The Secretary of State has taken into account the appropriate regulations. He finds that you are entitled to LGPS membership from when you commenced employment with the council on 4 January 1994 but you must pay the relevant contributions.
7. The Secretary of State’s decision confirms that made by the Appointed Person in that the council is not required to meet the cost of your pension contributions. His 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.
8. 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).
9. 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 December 1999 (with enclosures) and 1 February 2000; and
(b) from the Appointed Person: letter dated 17 January 2000 (with the enclosures copied to you with the Department’s letter of 21 January).
2. From the evidence submitted the following relevant points have been noted:
(a) from 16 September 1991 to 30 June 1993 you were a pensionable employee with XXX (XXX);
(b) on 11 August 1993 you received a return of your LGSS contributions;
(c) on 4 January 1994 you commenced employment with the council;
(d) on 2 May 1995 you became a member of the LGPS; and
(e) on 31 August 1998 you left the council to take up an appointment with XXX Council.
3. You appealed to the Appointed Person against the council’s failure to give you scheme membership and deduct pension contributions from your pay from when you started employment with them. You felt that the council should pay your contributions for the period before 2 May 1995 when you were automatically made a member of the LGPS (because of new regulations). You felt it to be unjust that the cost should fall on you as the council failed to properly inform you of your pensionable status when you commenced employment with them or when they decided to make you a member.
4. The Appointed Person found that there were no grounds for the council to meet the cost of your pension contributions for the period from 4 January 1994 to 2 May 1995, and there was no scope in the scheme for the fund authority to waive the collection of your contributions.
5. The Secretary of State has had regard to the regulations which, in his view, apply. When you started employment with the council on 4 January 1994 the 1986 regulations applied. Under regulation B1 an employee was entitled to membership of the LGPS (the LGSS as it was then known), provided they elected to join (regulation B1A). Under regulation B1A(2A) they were deemed to have made such an election unless they gave written notice that they did not wish to join.
6. Under regulation B1B a member could opt out of the LGPS. Until 2 May 1995 (when the 1995 regulations came into force), members who had opted out remained out of the scheme if they took up a new employment with a different LGPS employer, unless they elected to join. They were not deemed to have made an election to join on entering a new LGPS employment.
7. Under regulation C2 a member had to pay the appropriate contributions in order to accrue membership.
8. Under regulation C12 a member who left the LGPS with less than two years’ service, and did not re-join within one month and one day, was not entitled to pension benefits but was given a return of their contributions.
9. The Secretary of State has had regard to all the representations and evidence. You were a member of the LGPS while employed with XXX. You never opted out, but because you left with less than two years’ service you were given a return of contributions. You joined the council just over six months later. You did not give a written notice that you did not wish to join the LGPS, and you should therefore have been deemed to have elected to join, and contributions should have been deducted from your pay.
10. However, the council mistakenly believed you had opted out of the LGPS while employed by XXX. They therefore wrongly continued to treat you as opted out and did not deduct contributions until the 1995 regulations came into force on 2 May 1995.
11. The Secretary of State notes that there is some dissent whether XXX or the council were to blame for the misunderstanding. In the Secretary of State’s view, it cannot conclusively be shown why the misunderstanding arose. However, the question is irrelevant to your position since the council now accept that you had not, in fact, opted out.
12. The Secretary of State notes your various representations about the council’s mistake and to the effect that they did not properly inform you of pensions matters. He also notes the council’s representations to the effect that you should have been aware of your position from your payslips before 2 May 1995 and from the council’s statutory notification and benefits statements after that date, points which the Appointed Person accepted in his decision of 9 November 1999. Given that, for whatever reason, the council had mistakenly excluded you from the scheme, and that as a result of your queries and your appeal the mistake has been investigated and unearthed, the Secretary of State finds such representations are sterile. In his view, three things are clear: the council made a mistake in excluding you from the scheme; you were entitled to membership from 4 January 1994 to 2 May 1995; and you are required by the regulations to pay contributions for that membership.
13. The Secretary of State does not consider that any failure by you to challenge the council about your pension earlier than you did alters your entitlement to membership; equally he does not find convincing evidence of failures by the council or that their initial mistake amounts to maladministration. In any event, provided your membership is granted and you pay the contributions, you cannot be said to have suffered financial loss, since your pension will not be adversely affected and you would have had to have paid the contributions to gain membership for that period anyway. Thus there is in his view no case for the council meeting the cost of your contributions by way of compensation. In any case he has no power to award compensation even if maladministration causing financial loss or injustice were proved.
14. The Secretary of State concludes that the council must offer you membership for the period from 4 January 1994 to 2 May 1995 and that you must pay the employee’s contributions for that period.