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Our Ref: LGR 85/18/281 24 August 2000 798 INDEX |
LOCAL GOVERNMENT PENSION APPEAL
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 21 March 2000 in which you appeal (under regulation 102 of the 1997 regulations) on behalf of Mrs XXX, to the Secretary of State for the Environment, Transport and the Regions against the decision of Ms XXX, the Appointed Person in relation to Mrs XXX’s local government pension scheme (LGPS) dispute with XXX Council (the council).
2. The Appointed Person upheld the council’s decision that Mrs XXX was not eligible to be a member of the local government pension scheme (LGPS), for the period between 1 October 1992 to 15 August 1993, and to repay Mrs XXX’s contributions. You maintain that issues of maladministration and compensation should be examined and that a return of contributions is not adequate to cover loss of pension rights.
3. The question for decision: The question for decision by the Secretary of State is whether Mrs XXX is entitled to LGPS membership for the period 1 October 1992 to 15 August 1993 and whether there has been maladministration by the council.
4. Secretary of State’s decision: The Secretary of State finds that Mrs XXX is not entitled to LGPS membership for the period 1 October 1992 to 31 December 1992. There is no clear evidence that she is entitled to membership before 16 August 1993, though the council should review her eligibility for backdated membership before that date. He finds that the council have been guilty of maladministration in regard to the LGPS but he is not clear that Mrs XXX has suffered financial loss or injustice and he has no power to award compensation.
5. His decision upholds your appeal to the limited extent set out above. It replaces that made by the Appointed Person. The Secretary of State’s reasons and the regulatory provisions which he considers apply in Mrs XXX’s case are set out in the annex to this letter, which forms an integral part of this decision.
6. 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.
7. This completes the second stage of the internal dispute resolution procedure (IDRP). 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).
1) The following evidence has been received and taken into account:
a) from you: letters dated 21 March and 16 May 2000 (with enclosures); and
b) from the Appointed Person: letter dated 20 April 2000 (with enclosures sent to you with the Department’s letter of 2 May 2000).
2) 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 in cases where claims are made of maladministration with regard to the LGPS even where this has led to financial loss or injustice. Like the Appointed Person the Secretary of State has no powers to direct a local authority to act outside the provisions of the regulations. The Secretary of State has no power to determine questions relating to the Teachers’ Pension Scheme (TPS).
3) From the evidence submitted the following relevant points have been noted:
a) Mrs XXX’s date of birth is 17 January 1942;
b) she was employed by the council as a part-time tutor and paid an hourly rate;
c) she elected to join the TPS and on 1 October 1992 she commenced paying contributions to the TPS;
d) she received two annual benefit statements from XXX (the fund), one for benefits accrued to 31 March 1994 and one for benefits accrued to 31 March 1995;
e) on 4 September 1998 Mrs XXX’s representative, the NATFHE Regional Officer, wrote to the council, following up a letter of 24 February 1997, asking that her service details be sent to the TPS;
f) on 17 December 1999 the council informed Mrs XXX that she was entitled to count a period of membership in the LGPS from 16 August 1993, and in the TPS from 1 May 1995. She was offered a return of contributions for the period from 1 October 1992 to 15 August 1993 as, for that period, the council took the view that she was not entitled to membership of either the TPS or LGPS; and
g) on 8 February 2000 the council wrote to Mrs XXX to inform her that the TPS and the fund had been notified of her pensionable service details.
4) Mrs XXX refused to accept the return of contributions and instead sought a more beneficial use of them such as the purchase of added years. You requested on behalf of Mrs XXX an ex gratia compensation payment because of the poor handling of her case.
5) The Appointed Person found that “Mrs XXX had a series of part-time contracts of employment which were always for periods of less than 35 weeks per year and … ” she “was not paid for more than 15 hours per week.” She concluded that Mrs XXX was not eligible to be a member LGPS between the dates 1 October 1992 and 15 August 1993 according to the provisions of the 1986 regulations as amended, and that the council “acted correctly in refunding to Mrs XXX the contributions which were deducted during this period”.
6) The Secretary of State in reaching his decision has had regard to the regulations which, in his view, apply. During Mrs XXX’s period of employment in question with the council the 1986 regulations provided for pensionable service entitlement (membership) under the LGPS. The regulations permitted part-time employees in local government with contractual hours of 15 or more a week and contractual weeks of 35 or more to elect join the scheme under regulation B1A(1) and Part IV of Schedule 2. The eligibility requirement to work a minimum of 15 hours a week was removed with effect from 17 August 1993. Part-time employees who thus became eligible to join the LGPS could back-date their pensionable service to the date they entered the qualifying part time employment or 1 January 1993 (whichever was later) provided they elected to join before 17 February 1994 (paragraph 5 of Part IV of Schedule 2). On 2 May 1995 the 1986 regulations were revoked and superseded by the 1995 regulations. Membership of the LGPS was then opened up to all employees on an equal footing and the qualifying requirement of 35 contractual hours was effectively removed. The 1995 regulations did not apply to you as on 1 May 1995 you joined the TPS following introduction of their new eligibility rules.
7) Under the 1986 regulations (regulation N2) the council was required to make certain decisions about the status of an employee. These included whether they were whole-time, part-time or variable-time employees and whether they were pensionable employees. These decisions had to be made within three months of them starting employment and again as soon as practicable after any material changes in their employment. Regulation N3 required them to make decisions about benefits entitlements. Regulation N7 required them to notify the member of those decisions in writing as soon as reasonably practicable.
8) The Secretary of State has considered all the representations and evidence. In your letter of appeal of 21 March 2000 you refer to “the period from 1 October 1992 to 15 August 1993 when she was not eligible to be in the scheme”. Although in your letter of 11 February 2000 to Mr XXX you said “Doubts remain about whether she will receive any benefits for service August 1993 to May 1995”, you do not submit evidence or clear representations concerning that period. The Secretary of State notes the council’s letters of 17 December 1999 and 8 February 2000 which make it clear that they consider Mrs XXX was entitled to membership of the LGPS from 16 August 1993 to 30 April 1995, and that they were investigating a transfer of this membership to the TPS. The Secretary of State takes the view therefore that there is no disagreement that Mrs XXX was entitled to membership of the LGPS from 16 August 1993 to 1 May 1995. Thus he does not consider there is a matter for him to investigate and resolve concerning this period .
9) You do not dispute that the regulations have been correctly applied. Rather, you seek compensation on behalf of Mrs XXX equivalent to the loss of pension covering the period 1 October 1992 to 15 August 1993, and compensation for what you consider is the council’s maladministration in failing to provide accurate and timely information, incorrectly deducting contributions and issuing benefits statements, and misinforming her that her contributions had been placed in the TPS.
10) The Secretary of State takes the view that the contributions wrongly deducted from 1 October 1992 to 15 August 1993, the council’s subsequent decision to return them, and the misinformation about the destination of contributions, are largely matters concerning the TPS and the council’s administration of that scheme. He has no power to consider this. His consideration is restricted to whether LGPS membership can be offered to Mrs XXX for the period from 1 October 1992 to 15 August 1993, and whether the council failed to administer the requirements of the LGPS properly.
11) The Secretary of State notes that although Mrs XXX did not specifically elect to join the LGPS from 1 October 1992 her clear intention was to become a pensionable employee if she could, since she elected to join the TPS. He notes that in the council’s letter to Mrs XXX’s representatives of 17 December 1999, they explain that she was entitled to join the LGPS from 16 August 1993 as she was not eligible to join the TPS. They appear to treat her as having made the necessary election under regulation B1A of the 1986 regulations to join the LGPS and to have decided that from 16 August 1993 to 30 April 1995 she met the LGPS membership criteria. The Secretary of State notes that the council state in their letter of 17 December 1999 that Mrs XXX “worked for less than 15 hours per week for 35 weeks per year”. He also notes that she became eligible to join the TPS on 1 May 1995. Mrs XXX’s working arrangements are set out in copies of “ENGAGEMENT FORMS” and “CONTRACT OF EMPLOYMENT” forms. These forms show that she was required to attend specified venues, at specified times and days during weeks over a specified period (within the academic year September to July). The form for the earliest period shows that Mrs XXX began work on 21 September 1992 and indicated her contractual weeks to be eleven and that she was to work every Monday from 10 to 12 o’clock until 7 December 1992. Other forms show her continuing to work through the same academic year on other days at different venues until 2 July 1993.
12) Before 17 August 1993 a qualifying part-time employment did not include one in which the contractual weeks were fewer than 35 or the contractual hours were fewer than 15 a week. You do not contend that Mrs XXX’s employment met the criteria for a qualifying part time employment. The Secretary of State can find no clear evidence to show that Mrs XXX was in a qualifying part time employment before 17 August 1993. On that date the rules were changed to remove the restriction of a minimum of 15 hours a week. The Secretary of State deduces that this rule change is the reason why the council considered she became eligible to join the LGPS. Backdating was then allowed to the date she joined the qualifying part time employment or 1 January 1993 if later. The council appear to have backdated Mrs XXX’s membership by one day, to 16 August 1993. The Secretary of State does not consider the evidence clearly shows why. He notes that the Appointed Person concluded that Mrs XXX’s part-time contracts were always for periods of less than 35 weeks per year. It is not clear to him that the contractual weeks increased with effect from 16 August 1993. However, he accepts that the engagement/contract forms may not constitute an accurate or complete record. While Mrs XXX’s contractual arrangements are primarily an employment matter which the council as her employer are in the best position to determine, he considers that as the council consider she was eligible for membership when the regulations were amended to admit those working under 15 hours, they should re-consider whether she is eligible to have her membership backdated further.
13) As regards the deduction of contributions from 1 October 1992 to 15 August 1993, to the extent that they were treated as relating to membership of the TPS the Secretary of State has no power to consider them. However, contributions would be due for any further period of backdating of LGPS membership before 16 August 1993, if there were any.
14) The Secretary of State also considered whether the council were guilty of maladministration with regard to the LGPS. He notes that Mrs XXX did not qualify for membership of the TPS for the period of her employment with the council before 1 May 1995. It appears that the council incorrectly seem to have accepted her election to join the TPS with effect from 1 October 1992. This mistake does appear to have led to maladministration with regard to the LGPS. He notes that Mrs XXX received annual benefit statements from the fund but there is no evidence that other LGPS pension details were sent to her. It was the council’s responsibility in September 1992 to decide under part N of the 1986 regulations on Mrs XXX’s employment status and her eligibility to join the LGSS. They failed to do this and Mrs XXX received false information on her pension entitlements. There is no evidence that they informed her of their decision on her LGPS eligibility in August 1993. The council do not seem to have recognised their mistakes and made the appropriate decisions until sometime later. The Secretary of State takes the view that, while that this represents maladministration with regard to the LGPS, there is no clear evidence Mrs XXX has suffered financial loss or injustice. However, the Secretary of State has no power to award compensation in any event.