831 INDEX
LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)
1. I refer to your letter dated 19 October in which you appeal (under regulation 102 of the 1997 regulations) against the decision of Mr XXX, the Appointed Person for the XXX, in relation to your local government pension scheme (LGPS) dispute with the XXX.
2. The Appointed Person, in his decision dated 19 May 2000, upheld the XXX’s decision that the incorrect amounts of pension benefits that they had previously notified you could not be paid.
3. The questions for decision: The questions for decision by the Secretary of State are whether the XXX should have paid you incorrect pension benefits that they had previously notified you of, and whether you have suffered financial loss or injustice as a result of maladministration by XXX.
4. Secretary of State’s decision: The Secretary of State finds that the XXX could not pay you benefits you were not entitled to. He also finds that the XXX is guilty of maladministration, in that they supplied you with misleading information. However, he finds that no evidence has been presented which shows that you have suffered financial loss or injustice as a result of maladministration by the XXX. Regardless of this, even where this is shown to be the case, he has no power to award compensation.
5. The Secretary of State therefore dismisses your appeal. His decision confirms that made by the Appointed Person.
6. 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 his decision.
7. 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.
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 number 0207 233 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).
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 statutory provisions governing the LGPS have been correctly applied in the circumstances. The complaint you referred to the Appointed Person was that the XXX gave you misleading information that led to your making a decision which you would not otherwise have made.
2. The Secretary of State has considered all the representations and evidence, and has taken into account the appropriate regulations.
EVIDENCE RECEIVED
3. The following evidence has been received and taken into account:
a) from you: letters dated 19 October 2000 (with enclosures) and 1 December 2000; and
b) from the Appointed Person: letters dated 21 November 2000 (with the enclosures copied to you with the Department’s letter of 23 November 2000);
c) from the XXX: letter dated 14 December 2000.
REGULATIONS CONSIDERED AND REASONS FOR DECISION
4. From the evidence submitted the following relevant points have been noted:
a) You are a member of the LGPS;
b) You resigned from your employment with XXX with effect from 31 March 2000;
c) On 16 March the XXX sent you a notification of your benefits, and an election form for you to choose whether to receive reduced benefits from 31 March 2000, or to accept a deferred benefit to paid unreduced at your normal retirement age;
d) On 30 March the XXX wrote to you again apologising that they had made a mistake in calculating you benefit entitlement, and provided new figures and the option to make a different election; and
e) On 6 April you appealed to the Appointed Person against the XXX’s decision.
5. The Appointed Person stated in his determination that ‘I must.. confirm that as the amounts of the retirement benefits notified to you by the XXX on 30 March 2000 are the benefits to which you are properly entitled under the relevant provisions of the 1997 regulations following your retirement on 31 March 2000 the incorrect amounts notified to you previously cannot be paid.’ He also found that ‘there has been maladministration by the XXX.’
6. The Secretary of State in reaching his decision has had regard to the regulations which, in his view, apply. Regulation 11 of the Local Government Pension Scheme Regulations 1997, as amended, (the 1997 regulations) requires as follows –
‘(3) Membership in part-time service is counted as the appropriate fraction of the duration of membership.
(4) The numerator of that fraction is the number of contractual hours during the part-time service and its denominator is the number of contractual hours of that employment if it were on a whole-time basis.’
Regulation 20 (1) states that –
‘The amount of any benefit payable as a result of a person’s membership is generally calculated by multiplying his final pay by the appropriate multiplier.’
Regulation 21(3) provides that -
‘In the case of part-time employment, the final pay is the pay which would have been paid for a single comparable whole-time employment.’
7. The Secretary of State has considered the regulations. He finds, like the Appointed Person, that the XXX could not pay your pension benefits on the basis of calculations made in error. He notes that you do not dispute that the figures supplied to you in the XXX’s letter dated 30 March are correct or that the Scheme rules have been applied correctly in your case. Your complaint is, therefore, one of maladministration.
8. The Secretary of State notes your contention that the XXX mistakenly supplied a quote on 16 March 2000, and your statement that ‘I accepted this amount so that I could retire to nurse my invalid husband and when I received the revised figures in the letter dated 30 March 2000, after I had actually retired from work it was to late for me to change my decision, as I was now committed to care for my husband and his incapacity increased.’ It is not clear to the Secretary of State whether the decision to which you refer is your decision to retire, or your decision to elect to receive reduced benefits before your normal retirement age. He has, therefore, considered the question of both of your decisions. The Secretary of State notes that the XXX accept that the notification of benefits supplied to you on 16 March 2000 was based upon incorrect records and was, therefore, made in error. However, he also notes from the pension manager’s letter dated 12 April 2000 that ‘Leaving documentation was received from her employer in advance of her leaving date, (13 March 2000 to be precise).’ The Secretary of State notes that you have not disputed that you notified your employers of your intention to leave on or before 13 March. He further notes that the incorrect figures provided by the XXX were enclosed in a letter dated 16 March, and therefore post-dated your decision to leave your employment. It appears to the Secretary of State, therefore, that your decision to cease employment with XXX was independent of, and made without reference to, the first notification of your benefits made by XXX on 16 March.
9. The Secretary of State has next considered whether your decision to accept reduced benefits was influenced by the incorrect information supplied by the XXX on 16 March, and whether you have suffered financial loss or injustice as a result. He notes that in the XXX’s letter dated 30 March 2000, they state ‘The options that were sent to you were incorrect... The revised options are shown on the attached form. I should be pleased if you would return the election form indicating your new decision.’ He further notes the statement from the XXX’s pension manager in his letter to Mr XXX dated 12 April 2000: ‘Whilst I am unable to increase her benefit to the level of the figures in the option statement at attachment A, I am prepared to disregard Mrs Nurse’s election and allow her to defer receipt of her benefits until her 65th birthday when she would receive them unreduced...’ It is clear to the Secretary of State, therefore, that you were given the opportunity to reconsider your decision to take reduced benefits early, in light of the revised figures provided on the 30 March. It was not, therefore, too late for you to reconsider your decision to take benefits early.
10. The Secretary of State finds that it is not disputed that the XXX supplied incorrect figures to you regarding your pension benefits in their letter dated 16 March 2000. However, he also finds that the Regulations do not allow the XXX to pay you benefits you are not entitled to, and the Secretary of State has no powers to direct a local authority to act outside the provisions of the regulations. The Secretary of State, like the Appointed Person, considers that there is a prima facie case of maladministration against the XXX. However, he also finds that no evidence has been presented to him that suggests you have suffered financial loss or injustice as a result of the XXX’s mistake. This is because your decision to retire appears to have pre-dated the XXX’s notification to you of incorrect figures, and because you have been given the opportunity to alter your election to receive reduced benefits early. Regardless of this, the Secretary of State has no powers to award compensation even where it is shown that maladministration has taken place and caused financial loss or injustice.