LOCAL GOVERNMENT PENSION APPEAL

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)

1.                  I refer to your letter of 19 January 2000 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 XXX, the Appointed Person in relation to your local government pension scheme (LGPS) dispute with XXX Council (the council).

2.                  Your complaint is that the council gave you an incorrect estimate of your pension entitlement including lump sum commutation, on 8 March 1999.  You maintain that, on the strength of this, you agreed to take ill-health retirement rather than press for redeployment.  Shortly before you retired you received a revised pension figure including commutation which was substantially lower.  You do not contend that the lower figure is wrong, but that the council should pay in line with the initial estimate to compensate you.

3.                  The Appointed Person decided that you are receiving your correct pension entitlement under the regulations, and that it was not legally possible for the council to pay more than the regulations specified.  It would not be appropriate for them to pay the amount stated in their letter of 8 March 1999.

4.                  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 incorrect information has 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.

5.                  The question for decision: The question for decision by the Secretary of State is whether the council, having established that an error had been made in calculating an estimate of your LGPS benefits, should increase your benefits to the level of the estimate.

6.                  The Secretary of State has considered all the representations and evidence contained in your letters of 19 and 25 January and 15 February 2000, and in the Appointed Person’s letter of 4 February 2000.  Copies of documents supplied by the Appointed Person were sent to you under cover of the Department’s letter of 11 February 2000.

7.                  Secretary of State’s decision: The Secretary of State has taken into account the appropriate regulations.  He finds that the council are only empowered to pay your pension at the level set out under the relevant provisions of the LGPS.  They cannot increase your benefits to the level of an incorrect estimate.  His decision on this confirms that made by the Appointed Person.  The Secretary of State’s notes that the council put a disclaimer on the estimate they provided on 8 March 1999.  He accepts that, because an estimate is prepared in advance of decisions about termination of employment and may not take account of all the relevant circumstances, it is reasonable that it may vary from the actual pension payment.  In this case, the original estimates of pension and lump sum were based on a projected leaving date of 30 April 1999 and differed from the later figures, but not by a large amount.  However, there was a very substantial difference between the calculations on 8 March 1999 and 6 July 1999 of the effect of commuting your lump sum.  From the papers provided, there is no evidence that the council have explained how an error of such magnitude occurred.  In the Secretary of State’s view, this may amount to maladministration.  However, he has no power to order redress which would conflict with the requirements of the regulations or to award compensation even where it is shown that maladministration has led to financial loss or injustice.

8.                  In making his decision, the Secretary of State 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.

9.                  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 0207 233 8080).

10.              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 0207 834 9144).