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743 INDEX
LOCAL GOVERNMENT PENSION SCHEME 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 20 March 2000 in which you appeal (under regulation 102 of the 1997 regulations) against the decision of Mr XXX and Mr XXX, the Appointed Persons for XXX Council (the council), in relation to your local government pension scheme (LGPS) dispute with the council.
2. The Appointed Persons upheld the council's decision not to allow your leased car to be treated as pensionable remuneration.
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 Persons 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 Persons was against the refusal of the Head of XXX Finance Services, XXX Council, to register your interest in having your leased car treated as pensionable.
4. The question for decision: The question for decision by the Secretary of State is whether the money value of your leased car can be treated as pensionable pay for the purposes of calculating your LGPS benefits.
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:
a) the 1997 regulations do not allow you to treat the money value of your leased car as pensionable pay;
b) the time-limited opportunity under the 1986 regulations to lodge an appeal to allow the money value of your leased car to be treated as pensionable pay has expired and there are no current provisions allowing such an appeal;
c) the council failed properly to notify you of your time-limited right of appeal and the procedure they subsequently adopted to remedy this was flawed; on the face of it this may amount to maladministration which has caused you financial loss or injustice; and
d) there are no provisions in the regulations to award compensation where claims are made that incorrect or inadequate information has been provided with regard to the LGPS. Like the Appointed Persons, the Secretary of State cannot direct the council to act otherwise than in accordance with the regulations. The Secretary of State has no powers to direct the council to act outside the provisions of the regulations. Nor has the Secretary of State any power to order redress or award compensation even where maladministration is shown to have led to financial loss or injustice.
6. The Secretary of State therefore dismisses your appeal. His decision replaces that made by the Appointed Persons but has similar effect. 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 020 7233 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 020 7834 9144).
1. The following evidence has been received and taken into account:
from you: letter dated 20 March 2000 (with enclosures).
REGULATIONS CONSIDERED AND REASONS FOR DECISION
2. From the evidence submitted the following points have been noted:
a) in August 1998 the council informed you, in an undated letter, of their decision to grant retrospective requests from employees who wanted the value of their leased cars to be reflected in their scheme benefits, upon payment of a lump-sum representing the pension contributions on the value of the vehicle. The council also stipulated that registrations of interest had to be made by 30 November;
b) in April 1999 you made a formal request to the council to register your interest in having your leased car treated as pensionable;
c) the council responded in May 1999 stating that the deadline of 30 November 1998 had passed and that an exemption could not be made in your case.
3. Whilst you acknowledge receipt of the council’s letter, you maintain that as the letter was undated it could not prescribe the period by which any application would have to be submitted. You believe therefore that the council have committed an act of maladministration in that they did not properly advise you of your right to apply for your leased car arrangement to be treated as pensionable.
4. The Appointed Persons found that “You have not given us any reasons why you would be particularly prejudiced if this notification was excluded and we have concluded that there are no special grounds for granting your request for late inclusion. In our view the position was fairly stated in the general letter of August 1998, a period of three clear months was given and there is now no basis for extending the closing date to employees who failed to reply before 30 November 1998.”.
5. The Secretary of State has considered the relevant regulations. He notes that the position in respect of leased cars is that, before January 1993, the personal use element of their value was in some cases treated as an allowance in kind, thus forming part of the remuneration used in determining what contributions were deducted. In response to a request from employers, the regulations changed with effect from 1 January 1993 by an amendment to the 1986 regulations which specifically excluded the money value of the provision of a motor vehicle (exclusion (g) in the definition of remuneration in Schedule 1 to the 1986 regulations). Those employees who had had the money value of a leased car treated as remuneration on which contributions were deducted continued to have it so treated notwithstanding the amendment, as long as they continued without a break to have a leased car provided by their employer (regulation C17). A time-limited period in which to appeal where employers were not treating the personal use value as remuneration was also included in the amendment. This period expired on 1 April 1993 - regulation N9 of the 1986 regulations. The 1986 regulations were superseded by the 1995 regulations from 2 May 1995 and for active members these were superseded by the 1997 regulations from 1 April 1998. Regulation C2(2)(f) of the 1995 regulations and regulation 13(f) of the 1997 regulations exclude leased cars or any other payment in lieu of one. The protection afforded by the earlier amendment was continued by provisions in schedule C2 paragraph 7 of the 1995 regulations and by regulation 13(8) of the 1997 regulations.
6. The Secretary of State notes that the council admit that they failed to inform scheme members when the regulations were amended. He also notes that the letter the council sent to you giving a further opportunity to register your interest was undated. It would appear to the Secretary of State that the council recognised that the processes in place prior to the change in the regulations were not sufficient to ensure that individuals were treated correctly under the terms of the regulations in place at that time. Unfortunately it also appears to be the case that the process set up in August 1998 to rectify this past failure was not beyond reproach, and the manner in which this restitution was intended to operate appears itself to be flawed. There is, however, no provision under the LGPS regulations by which the Secretary of State can rectify this, since appeals to him on matters relating to the eligibility of counting the personal use element of a leased car as pensionable have not been possible since July 1993.
7. The Secretary of State concludes therefore that the time-limited opportunity under the 1986 regulations to lodge an appeal to allow the money value of your leased car to be treated as pensionable pay has expired and there are no current provisions allowing such an appeal. The Secretary of State also finds that, whilst on the face of it, the council's failure to properly notify you of your time-limited right of appeal and the flawed procedure they subsequently adopted to remedy this situation may amount to maladministration, he does not have any power to order redress or award compensation even where maladministration is shown to have led to financial loss or injustice.