LOCAL GOVERNMENT PENSION APPEAL

 

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)

 

1.                  I refer to your letter of 30 January 2000 in which you appeal (under regulation 102 of the 1997 regulations) against the decision of Mr XXX, the Appointed Person for XXX County Council (the council), in relation to your local government pension scheme (LGPS) dispute with the council.

 

2.                  In March 1999 you received an estimate from the council of the level of LGPS benefits you would be entitled to receive upon the termination of your employment with XXX School.  You also received an estimate of the potential value of transferring an FSAVC into the in-house AVC arrangement.  Based on these estimates you converted your FSAVC to the in-house AVC scheme.  In June 1999 your employment with the school was terminated on the grounds of redundancy and you were awarded 2 years and 20 days increase in your total membership under regulation 52 of the 1997 regulations (augmentation).  In September 1999 an Inland Revenue check revealed that your pension, taking into account your Armed Forces benefits and including augmentation, exceeded Inland Revenue limits and that the AVC fund value represented an over-funding position.  Whilst you do not dispute that the LGPS and Inland Revenue rules have been correctly applied, you consider that you are entitled to compensation because of negligence and maladministration by the council in providing incorrect advice regarding the transfer of your FSAVC and the award of augmentation, which you maintain has led to a substantial loss of potential pension.

 

3.                  The Appointed Person determined that he was unable to listen to complaints of maladministration and that he had no power or authority to award compensation.

 

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 statutory provisions governing the LGPS have been correctly applied in the circumstances.  The Secretary of State has no powers to direct the council to act outside the provisions of the regulations.  The disagreement you referred to the Appointed Person was for compensation because of negligence and maladministration by the council in providing incorrect advice.

 

5.                  Secretary of State’s decision: The Secretary of State has considered all the representations and evidence, and has taken into account the appropriate regulations.  He finds first that he has no locus in your purchase of an FSAVC which, it appears, put you in an over-funding position.  It appears to the Secretary of State that the over-funding arose from you taking out this FSAVC in the first place, and not from transferring it to the LGPS in-house AVC scheme.  It is therefore, in his view, a matter for the XXX to answer, not the council.  Secondly, the Secretary of State accepts the view of the Appointed Person that the Pensions Section should,

 

6.                  The council with the knowledge they had in their possession about your Armed Services pension, have undertaken an Inland Revenue headroom check before providing an estimate of your benefits.  However, he finds that there are no provisions in the regulations to award compensation where claims are made that incorrect advice has been provided with regard to the LGPS.  Like the Appointed Person, the Secretary of State cannot direct the council to act otherwise than in accordance with the regulations.  The benefits payable to you were constrained by the statutory provisions of the LGPS and Inland Revenue rules, notwithstanding the incorrect estimate, and they are those which you are receiving.  The papers submitted indicate to the Secretary of State that you had no choice whether your employment was terminated, and therefore, it is not clear to him that you have suffered any financial loss as a result of the misleading advice you were given.  In any event, the Secretary of State has no power to order redress or award compensation even where maladministration is shown to have led to financial loss or injustice.  He therefore dismisses your appeal.  His decision confirms that made by the Appointed Person.  He is acting judicially and has no power to modify the way the regulations 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 0207 233 8080).

 

8.                  The Pensions Ombudsman may investigate and determine any complaint of maladministration or any dispute of fact or law in relation to the local government pension scheme.  His address is 11 Belgrave Road, London, SW1V 1RB (telephone number 0207 834 9144).