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Our Ref: LGR85/18/335 26 January 2001 835 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 dated 9 August 2000 in which you appeal (under regulation 102 of the 1997 regulations), against the decision of Mr XXX, the Appointed Person for XXX Fund (the fund), in relation to your local government pension scheme dispute with the fund.
2) The Appointed Person found that the fund had no power to extend the parts of the Transitional Provisions Regulations that deal with widowers’ cover for active members to those with preserved benefits under the 1995 regulations.
3) The question for decision: The question for decision by the Secretary of State is whether your pre-1988 membership of the LGPS can count in the calculation of any widowers’ benefits that may become payable.
4) The Secretary of State’s decision: The Secretary of State has considered all the representations and evidence submitted to him, and has taken into account the appropriate regulations. He finds that you are entitled to count your pre-1988 membership for the purpose of widower’s benefits.
5) The Secretary of State therefore allows your appeal. His decision replaces that made by the Appointed Person.
6) You also asked the Secretary of State to consider whether there was poor administration by the Fund. Even if evidence of maladministration was clear and there was evidence you had suffered financial loss or injustice the Secretary of State has no powers to award compensation.
7) The Secretary of State’s reasons and the regulations he considers apply in this case are set out in the annex to this letter, which forms an integral part of the decision. 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 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 in relation to the local government pension scheme made or referred in accordance with the Pension Schemes Act 1993. His address is 11 Belgrave Road, London, SW1V 1RB (telephone 020 7834 9144).
1) The following evidence has been received and taken into account:
a) from you: letters dated 9 August (with enclosures) and 15 September 2000;
b) from the Appointed Person: letter dated 7 September 2000 with copies of the documents considered by him (list of documents and copies sent to you under cover of the Department’s letter of 14 September 2000); and
c) from Mr XXX, XXX Council; letter dated 10 October 2000 (copied to you under cover of the Department’s letter of 19 October 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 of the 1997 regulations. These regulations refer 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.
3) From the evidence submitted the following points have been noted:
a) You were employed by the council until 31 March 1995;
b) You were a member of the LGPS;
c) On 1 April 1995 your employment transferred to XXX Ltd (the company);
d) Your membership with the LGPS continued as the company is an admitted body; and
e) In 1996 and 1997 you elected for your membership in the LGPS up to 1 April 1995 to be preserved.
4) The disagreement you referred to the Appointed Person concerned the benefits payable to your husband if you were to die before him, specifically whether your pre-1988 membership would count for widower’s benefits as you had elected to defer (preserve) your membership prior to 1 April 1995 in the LGPS. You explained that you reached your decision to defer this period of membership following lengthy discussions with the Council’s technical team who assured you that you “… could not lose out; that you would have the option to combine your benefits in the future …”. You also explained that you were aware of the option in the “old scheme” to “… have paid … in order that my pre-1988 service could be counted towards my spouse’s pension.”. You explained why you decided not to do this, one of the reasons being that you were not married at the time the option was offered in September 1992. You further explained that “… the Pension Fund under the “new” scheme, and I applied then for it, decided that all women who were currently active members should be allowed to count their pre-1988 service at no extra cost.”. You consider you have “… lost out in the case of my spouse’s pension, because I made a sensible decision, in the light of an uncertain future, to preserve my benefits”. You are aware that under the 1997 regulations your pre-1988 service would count towards spouse’s benefits had you not deferred your benefits for membership prior to 1 April 1995.
5) Mr XXX, Principal Technical Officer, for the Fund, in a memorandum to the Appointed Person, explained the position as far as the Fund were aware. He concluded that when you transferred your employment from the council to the company Ltd, on 1 April 1995, you chose to preserve your benefits based on your membership up to 31 March 1995. The effect of this was that you lost the right to buy back your pre-1988 membership for widower’s pension purposes. He explained that you lost this right because the relevant elections could only be made by contributors in an employment to which the relevant pre-1988 membership related. He further explained that on 1 April 1998 the 1995 regulations were replaced by the 1997 regulations and people who were active members on 31 March 1998 transferred automatically to the new scheme. Deferred benefits in place on 31 March 1998 initially remained subject to the 1995 regulations but could in some cases be added to later benefits under the 1997 regulations. He commented that the Department decided not to carry forward the provisions within the 1995 regulations relating to buying back pre-1988 membership for widowers’ pensions. However, the Transitional Provisions Regulations did protect the position of active members who would suffer by removing these provisions. He considered that the Transitional Provisions Regulations gave women who had, prior to 1 April 1998, been eligible to elect to count pre-1988 membership for widower’s pension but had not done so, a further opportunity. The Fund adopted a policy of treating all female active members who transferred into the new scheme as being eligible to make elections to count any membership between 1972 and 1988 towards widowers’ pensions and as having done so prior to 1 April 1998. He concluded that if you had not preserved your benefits up to 31 March 1995, you would have been treated as someone who had pre-1988 membership in your current employment at the time of transfer to the new scheme and would have benefited from the Fund’s decision to treat you as if you had made an election to count that membership for widowers’ pension purposes immediately prior to 1 April 1998.
6) It appears that the Appointed Person accepted this as the position and determined that “The Fund has no power to extend the parts of the Transitional Provisions Regulations that deal with widowers’ cover for active members to those with preserved benefits under the 1995 regulations.”.
7) The Secretary of State notes that you initially decided not to elect to make additional contributions so that your pre-1988 membership would count for the purposes of a widower’s long-term pension (regulation E6 of the 1986 regulations). Such an election could only be made within 12 months of either 28 February 1992, marriage, or the spouse becoming wholly or mainly dependent on his wife due to ill-health. The administering authority did have discretion to extend this period if they so determined (regulation E6(11) of the 1986 regulations). Similar provisions (schedule F1 of the 1995 regulations) applied under the 1995 regulations which replaced the 1986 regulations.
8) The Secretary of State notes that you elected to preserve your benefits in the LGPS prior to 1 April 1995. As a consequence the Fund concluded that you had lost the right to make an election in relation to your pre-1988 membership for a widower’s pension because such an election could only be made by contributors in an employment to which the relevant pre-1988 membership related. The Secretary of State in reaching his decision has had regard to the regulations which, in his view, apply. At the time of your marriage regulation E6(7) of the 1986 regulations applied. This provision provided that a married woman could elect that (subject to contributions being paid) her per-1988 membership counted for the purposes of widowers’ benefits. This provision continued in the 1995 regulations, Schedule F1. Both provisions refer to a member who has been a continuous member since 27 July 1989. A continuous member includes a woman who on ceasing to be a member has become a member again within one month of so ceasing (Schedule F1 paragraph 1(2)). The Secretary of State recognises that the intention was that all active female members with pre-1988 membership should be covered. The Secretary of State notes that it has not been disputed that you were a member on 27 July 1989, nor has any evidence been produced to the effect that you ceased to be a member at any other time. The Secretary of State concludes that although you preserved your benefits for your membership up to 31 March 1995, for the purposes of regulation E6(7) of the 1986 regulations and Schedule F1 of the 1995 regulations you had been a continuous member since 27 July 1989. The Secretary of State finds that the Fund was wrong to conclude that you had to be a contributor in an employment to which your pre-1988 membership related; what the regulations required was that you had to be a continuous member since 27 July 1989. He concludes that on the evidence available you were such a member.
9) The Secretary of State therefore finds that you could have made an election up to 31 March 1998 so that your pre-1988 membership would count for the purposes of widowers’ benefits. However, although such an election could be made once 12 months from your marriage had passed it was at the discretion of the Fund whether they accepted it (Schedule F1(1)(5)). The Secretary of State notes that the Fund adopted a policy treating all female active members who transferred into the new scheme as being eligible to make elections to count any membership between 1972 and 1988 towards widowers’ pensions and as having done so prior to 1 April 1998. The Secretary of State therefore concludes that as a consequence of the Fund’s policy you were eligible to make such an election up to 31 March 1998, you were an active member and you transferred into the new scheme (even though you have deferred benefits which relate to membership before 1 April 1995 and are payable under the 1995 regulations) the Fund should treat you in line with their policy.
10) The Secretary of State therefore finds that your pre-1988 membership should count for the purposes of widowers’ benefits and he allows your appeal