868 INDEX
SUPERANNUATION ACT 1972
LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)
1. I refer to your undated letter received in the Department on 7 August 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).
2. The Appointed Person upheld the council’s decision that you did not have the right to receive a single lump sum payment in lieu of your pension payments. You contend that when you joined the LGPS you were told that if there was any unforeseen reason for leaving employment you would receive your money back.
3. The question for decision: The question for the Secretary of State to decide is whether you are entitled to a lump sum payment instead of annual pension payments.
4. Secretary of State’s decision: The Secretary of State has decided that you are not entitled to a lump sum payment instead of annual pension payments.
5. The Secretary of State dismisses your appeal. His decision confirms that made by the Appointed Person.
6. 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 his decision.
7. 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 or enter into 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 which they have failed to resolve. Their address is 11 Belgrave Road, London, SW1V 1RB (telephone number 020 7233 8080).
9. 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 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 where claims are made that misleading information has been provided with regard to the LGPS. Like the Appointed Person the Secretary of State has no powers to direct a local authority to act outside the provisions of the regulations.
2. The Secretary of State has considered all the representations and evidence, and has taken into account the appropriate regulations.
3. The following evidence has been received and taken into account:
(a) from you: letter received in the Department on 7 August 2000 (with enclosures); and
(b) from the Appointed Person: letter dated 29 August 2000 (with enclosures copied to you with the Department’s letter of 11 September).
4. From the evidence submitted the following relevant points have been noted:
(a) your date of birth is 29 September 1954;
(b) on 1 January 1996 you joined the LGPS when you started employment with the council;
(c) on 11 April 1999 you ceased employment receiving immediate payment of your retirement benefits on ill-health grounds; and
(d) you were paid a lump sum of £553.68 and received an annual pension of £184.56.
5. The council refused your request to convert your annual pension into a single lump sum payment as you were not a member of the LGPS before 18 March 1987. You appealed to the Appointed Person against this decision. You contended that when you joined the LGPS you were advised that if you and your colleagues were not “able to see our service through we would receive our money back” that, “had I known this was not to be I would not have joined” and that your pension is such a small amount each month it would have more useful impact if paid as a lump sum.
6. The Appointed Person found that your complaint concerned the proper application of regulation 49 of the 1997 regulations which permits an LGPS member on reaching state pensionable age and is entitled to a retirement pension of not more than £195 a year to be paid a lump sum representing the capital value of the pension. He found that you were not eligible under these terms until you attained state pensionable age. He also explained the provision under regulation 59 that allowed a member to convert annual pension to a lump sum payment. He said that this was only available to those who joined the LGPS before 17 March 1987 (a Class C member).
7. You appealed to the Secretary of State against the Appointed Person’s decision. You referred back to the reason you appealed in the first place. You contend that you feel you were misled when you joined the LGPS because you were told “if there was any unforeseen reason for leaving employment we would receive our money back”.
8. The Secretary of State in reaching his decision has had regard to the regulations which, in his view, entitle a member to a single lump sum payment instead of annual pension payments. When you ceased employment the 1997 regulations applied. A member could normally expect to receive payment of his retirement benefits (pension and lump sum) at his normal retirement date (NRD). If a member left local government service before his NRD he was not normally entitled to a refund of his contributions or any payment of benefits. His entitlement to retirement benefits would be deferred (frozen) until he reached his NRD, expect in certain specified circumstances. These included, as in your case, immediate payment of benefit where a member ceased employment on ill-health grounds (regulation 27).
9. A member was only entitled to a refund of his contributions if he ceased local government employment with less than two years total membership (calendar length) and did not become a member again within one month and one day (regulation 87). A member who reached state pensionable age and was entitled to a retirement pension of not more than £195 a year may instead be paid a lump sum representing the capital value of the pension at the council’s discretion (regulation 49). A member with continuous membership from before 17 March 1987 is entitled to convert pension to lump sum within certain limits (regulation 59).
10. The Secretary of State has considered all the evidence. He notes that you do not contend that the council and the Appointed Person have got the regulations wrong. It is noted that the council initially agreed to convert your annual pension into a lump sum and so extinguish your rights to further payment of retirement benefits, but later cancelled the decision when they realised that the power to do so did not apply in your case. The Appointed Person found that they clearly did not have the power under the 1997 regulations to convert pension into lump sum. The Secretary of State agrees that neither regulation 49 nor regulation 59 can apply to allow conversion in your case for the reasons given by the Appointed Person. The Secretary of State has considered whether you qualify for a refund of contributions under regulation 87. However, you have more than 2 years total membership. The Secretary of State therefore upholds the council’s and Appointed Person’s view that the 1997 regulations do not qualify you for payment of your benefits as a lump sum.
11. The Secretary of State has considered your contention you were advised, when you joined the LGPS, that you would receive your money back if you were not “able to see your service through”. The Secretary of State notes that when you started employment the council was required to decide on your pensionable status and inform you of their decision. While you contend you were advised you could receive your money back, you have provided no objective evidence of this. The Secretary of State notes the council did not respond to this contention. He takes the view that no conclusive evidence has been provided on this matter. However, even if it were shown that the information you received was inaccurate or misleading, there is no evidence that you have suffered financial loss or injustice. In any case the Secretary of State has no powers to award compensation under such circumstances.