805      INDEX

 

Our Ref: LGR85/18/322

13 September 2000

LOCAL GOVERNMENT PENSION SCHEME APPEAL

 

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)

 

1)      I refer to your letter of 18 July 2000 in which you appeal (under regulation 102 of the 1997 regulations) against the decision of Mr XXX, the Appointed Person for the XXX Fund (the fund), in relation to your local government pension scheme (LGPS) dispute with XXX (the council).

 

2)      The Appointed Person, in his decision letter of 6 June 2000, concluded that the office expenses allowance included within your salary payments is not pensionable and dismissed your appeal.  He explained that he was unable to consider matters of maladministration.

 

3)      The questions for decision:  The questions you have asked the Secretary of State to consider are whether you are entitled to compensation;

 

a)      for the reduction in pensionable benefits as a result of inaccurate information being provided; and

 

b)      because you were not informed of the inaccurate information earlier and have lost the opportunity to provide your own pension arrangements in making up the resultant gap in your pension entitlement.

 

4)      The Secretary of State’s decision:  The Secretary of State finds that;

 

a)      it has not been disputed that you were provided with inaccurate information and as a result were under the impression that you would receive higher pension benefits than those you are entitled to under the 1997 regulations.  He finds that this may amount to maladministration;

 

b)      it is not clear to the Secretary of State that you have suffered financial loss as a result of the delay in informing you of the inaccurate information provided to you in the annual benefit statements; and

 

c)      the Secretary of State has no power to award compensation for maladministration even where it has been shown to have led to financial loss or injustice.

 

5)        The following paragraph explains the reasons for the Secretary of State’s decision.

 

6)      The Secretary of States notes that the Appointed Person considered you paid pension contributions on the whole of your salary, which included an element for office allowance expenses.  He agrees with the Appointed Person that allowances for expenses are excluded from a member’s pay (regulation 13(2)(b) of the 1997 regulations).  A member’s pay (as set out in regulation 13 of the 1997 regulations) is used to determine the level on which contributions are paid and for calculating pension benefits.   He further notes that the Appointed Person found your pensionable pay figure was provided to the fund by the council.  As a result of the inaccurate information provided you paid higher contributions than you should have done and your pension benefits are less than you expected.  The Secretary of State also notes that the Appointed Person refers to arrears of pay made to you in 1997; however you have not raised this as part of your appeal to the Secretary of State and he is unable to comment on this matter.  He further notes that you maintain that because you were not informed earlier that the information was inaccurate, you have lost the opportunity to provide your own pension arrangements to make up the gap in your pension entitlement.  Under the LGPS you did not have an entitlement to pension benefits based on the allowance for office expenses.  Nor would it have been possible for you to make additional pension arrangements as a person cannot, under Inland Revenue rules, pay into two pension schemes for the same employment.

 

7)      The Secretary of State dismisses your appeal.  His decision adds to but does not replace the Appointed Person’s decision. 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 or enter into any further correspondence with you about the decision.  The decision is binding and can only be overturned by a judgement of the High Court or the Pensions Ombudsman.

 

8)      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 they have failed to resolve.  Their address is 11 Belgrave Road, London, SW1V 1RB (telephone 020 7233 8080).

 

9)      The Pensions Ombudsman may investigate and determine any complaint of maladministration or any dispute of fact or law 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).