760      INDEX

 

 

LOCAL GOVERNMENT PENSIONS APPEAL

 

SUPERANNUATION ACT 1972

THE SOCIAL SECURITY ACT 1975

THE SOCIAL SECURITY ACT 1986

SOCIAL SECURITY CONTRIBUTION AND  BENEFITS ACT 1992 

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)

 

1.                  I refer to your letter of 27 March 2000 in which you appeal (under regulation 102 of the 1997 regulations), against the decision of Mr XXX, the Appointed Person for XXX (the company), in relation to your local government pension scheme (LGPS) dispute with the company.

 

2.                  The Appointed Person found that the complaint which you raised did not relate directly to the Scheme, and that he therefore had not authority to consider your complaint.

 

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.  The Secretary of State has no powers to direct the company to act outside the provisions of the regulations.  The disagreement you referred to the Appointed Person was, as he understands it, whether you ‘have been misguided into a situation which has disadvantaged (your) right to Additional Pension (SERPS).’

 

4.                  The question for decision: The question for decision by the Secretary of State is whether you have been misguided into a situation which has disadvantaged your right to additional pension (SERPS).

 

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, like the Appointed Person, that your complaint does not relate directly to the Scheme and, therefore, he does not have authority to consider it. The Secretary of State 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. However, the Secretary of State believes it will be helpful to provide the following explanation of changes that took place regarding The State Earnings Related Pension.

 

6.                  The State Earnings Related Pension was introduced by virtue of the Social Security Act  1975. Its purpose was to provide an earnings related second pension supplement to the stock flat rate N.I. pension. It provided benefits in respect of earnings between lower and upper earnings levels, (LEL & UEL). The LEL per week was £11 in 1975 rising now to £67, the UEL per week  was £69 and is now £535. Your scheme had to at least match this, but could pay benefits on earnings in excess of UEL but also provided a lump sum of 3x pension, not available in SERPS. It was not intended to replace good quality employer provided occupational pensions schemes. For that reason such schemes could contract out of SERPS by guaranteeing to provide a level of benefit at least equal to SERPS – the GMP. Members of schemes which had contracted out enjoyed a reduction in their National Insurance costs, and received tax relief on contributions to the scheme. In the same ways that modification which has been explained to you, and which you understand, did not allow benefits in respect of same pay and from same source to overlap, there was never any intention that a person could receive a GMP and an Occupational Pension. The GMP simply forms part of the occupational pension. As part of the original contracting out in 1975, the interaction between SERPS and an occupational scheme had to be spelled out to members. You appear to have misconceived this fundamental aspect of SERPS – which should also have been made clear in 1987, when portability and personal pensions were introduced by virtue of the Social Security Act 1986.

 

7.                  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).