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Our Ref: LGR 85/18/263 21 March 2000 |
709 INDEX
SUPERANNUATION ACT 1972
LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)
1. I refer to your letter of 4 February 2000 in which you appeal (under regulation 102 of the 1997 regulations) against the decision, dated 22 October 1999, of Mr XXX, the Appointed Person for the London Borough of XXX (the council), in relation to your local government pension scheme (LGPS) dispute with the council.
2. The Appointed Person determined that the council were correct in deducting a lump sum to cover contributions that you would have made on your overtime payments had these earnings been deemed to be pensionable at the time.
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 statutory 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 the council to act otherwise than in accordance with the regulations.
4. The questions for decision: The questions for decision by the Secretary of State are:
a) whether the council were required to collect LGPS contributions on your overtime payments which the Appointed Person found, in his letter of 3 August 1999, should be treated as pensionable for the purpose of calculating your LGPS benefits; and
b) whether the council, as a result of maladministration, should pay you compensation due to their handling of your case and the financial hardship and additional problems you maintain this has caused you.
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 that the council were required to collect LGPS contributions that you would have made if your overtime payments had been deemed to be pensionable at the time they were paid. The Secretary of State also finds no compelling evidence of maladministration, but in any case he has no power to award compensation even if maladministration were shown to have led to financial loss or injustice. The Secretary of State has no powers to direct the council to act outside the provisions of the regulations. He therefore dismisses your appeal. His reasons and the regulations which he considers apply in your case are set out in the annex to this letter, which forms an integral part of the decision.
6. The Secretary of State’s 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).
1. The following evidence has been received and taken into account:
from you: letter dated 4 February 2000 (with enclosures).
REGULATIONS CONSIDERED AND REASONS FOR DECISION
2. From the evidence submitted the following points have been noted:
a) on 17 December 1998 you wrote to the council regarding the level of LGPS benefits you would receive following your retirement on the grounds of ill-health. You believed that your basic pay should include overtime payments as you considered that they were contractual;
b) on 22 December 1998 the council replied, stating that “… your contract states that overtime is to be worked as and when required. As there is no contractual obligation your overtime payments are not pensionable and therefore cannot be taken into account when calculating your benefits.”;
c) you appealed to the Appointed Person against the council’s decision;
d) the Appointed Person determined that the overtime payments you received were to be treated as pensionable pay for the purpose of calculating the level of your LGPS benefits; based on his decision, the council sent you a cheque to cover the balance of your lump sum retiring allowance minus a lump sum to cover contributions owing on your overtime payments; and
e) you made a further appeal to the Appointed Person as you considered it unfair that the council should have deducted the lump sum to cover contributions owing on your overtime payments and because you considered that the council should pay you compensation due to their handling of your case.
3. The Appointed Person determined that the council were correct in deducting a lump sum which represented the contributions that you would have paid had these earnings been deemed to be pensionable at the time.
4. The Secretary of State in reaching his decision has had regard to the regulations which, in his view, apply. At the time you ceased employment with the council the 1997 regulations were in force. He notes that you consider it unfair that the council deducted a lump sum to cover contributions for your overtime payments. Like the Appointed Person, the Secretary of State cannot direct the council to act otherwise than in accordance with the regulations. Regulation 89(1) of the 1997 regulations requires an employing authority to deduct, from a member’s pay, any LGPS contributions payable. Where any sum remains due which has not been deducted, regulation 89(3)(b) gives the administering authority power to recover outstanding contributions by deducting them from a member’s benefits. The Secretary of State concludes, therefore, that the council were required to collect LGPS contributions that you would have made had your overtime payments been deemed to be pensionable at the time.
5. The Secretary of State also notes that you consider that you are entitled to compensation because of maladministration and incompetence on the part of the council in the handling of your case and that this was a matter you referred to the Appointed Person. The Secretary of State accepts that the council’s initial decision not to treat your overtime as contractual was wrong. You appealed against that decision, and the matter was dealt with, in the Secretary of State’s view quite properly, by the Appointed Person. Following the Appointed Person’s decision, the council’s wrong initial decision was overturned and the matter was then put right, without undue delay. There is no evidence that you raised with the council the question of non-deduction of contributions on your overtime payments, at the time those payments were made. The Secretary of State finds no compelling evidence has been submitted which conclusively validates your claim that the council did not carry out their responsibilities in a professional and efficient manner. In his view, a decision which is shown on appeal to be wrong does not necessarily constitute maladministration. The Secretary of State notes that the Appointed Person did not consider the question of maladministration, even though you referred it to him in your letter of 8 October 1999, but neither the Appointed Person nor the Secretary of State have any power to order redress which would conflict with the requirements of the regulations, or award compensation, even where it is shown that maladministration has taken place causing financial loss or injustice.