LOCAL GOVERNMENT PENSION APPEAL

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) 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) relating to the commutation of retirement pension for your employment with XXX Council (XXX).

2.                  The Appointed Person upheld the council’s decision that your retirement pension could not be commuted to a lump sum.

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.

4.                  The question for decision: The question for decision by the Secretary of State is whether the council can commute your retirement pension to a lump sum representing the capital value of the pension.

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 28 February 2000.  The Appointed Person has also sent copies of your letter of 2 March to him and his reply.

6.                  Secretary of State’s decision: The Secretary of State has taken into account the appropriate regulations.  He finds that the council cannot commute your retirement pension to a lump sum representing the capital value of the pension.  His decision confirms 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 4 (with enclosures) and 29 February 2000; and

(b)               from the Appointed Person: letter dated 17 February (with the enclosures listed in the Department’s letter of 28 February) and copies of further correspondence received on 16 March 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 28 February 1935;

(b)               on 4 July 1993 you took early retirement from the council;

(c)               on 1 April 1997 you were re-employed by the council; and

(d)               on 1 April 1998 you were transferred to XXX.

3.                  It is not disputed that you are receiving a retirement pension for your employment with the council, which terminated on 4 July 1993, of £7,909.20 a year.  Nor is it disputed that you received a retirement pension from XXX of £121.19 a year with a lump sum retirement grant of £363.58.  The Secretary of State notes you contended that the council offered in writing to commute the retirement pension for your employment with XXX and that you consider that you are entitled to commutation of this pension as your other retirement pension is for employment with a different employer.

4.                  The Appointed Person found that it was not possible to uphold your complaint that your retirement pension for employment with XXX should be commuted to a lump sum as the 1997 regulations do not allow this.

5.                  The Secretary of State in reaching his decision has had regard to the regulations which, in his view, apply.  When you became entitled to payment of your annual retirement pension relating to your employment with XXX the 1997 regulations applied to your pension entitlement.  Under the 1997 regulations where an LGPS member reaches the state pensionable age and is entitled to a retirement pension of not more than £195 a year he may be paid a lump sum representing the capital value of the pension (regulation 49).  If the member is entitled to more that one retirement pension under the LGPS a lump sum commutation is payable only if the aggregate amount payable to the member is less than £195 (regulation 49(3)).

6.                  The Secretary of State has considered all the evidence.  He takes the view that the 1997 regulations clearly do not permit your retirement pension in respect of your employment with XXX to be commuted as both that pension and your pension from your employment with the council are paid under the LGPS and the aggregate amount payable exceeds £195 a year.  The Secretary of State notes your claim that the council promised to commute your pension for your employment with XXX.  It appears that when the council sent you an estimate of your pension entitlement they answered your query about whether they could commute your retirement pension by including an estimate of the lump sum you could receive if your annual pension on retiring from XXX were commuted. They say they included with these estimates the disclaimer that the estimates did not “constitute a contract”.  They later discovered you had an existing entitlement to an LGPS pension disqualifying you from commutation under the 1997 regulations.  The council can only pay benefits as set out in the 1997 regulations and the Secretary of State does not have the power to direct them to do otherwise.  Nor does he 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 leading to financial loss or injustice.  Your appeal is therefore dismissed as the regulations do not entitle you to commutation of retirement pension.