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Our Ref: LGR85/18 5 November 1999
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646 INDEX
LOCAL GOVERNMENT PENSION SCHEME APPEAL
LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)
1) I refer to your letter of 18 October 1999 (received in the Department on 26 October) 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 (the Fund).
2) The Appointed Person found that your benefits had been correctly calculated in accordance with the relevant regulations. He also found that the 1997 benefit statement was incorrect but concluded that he could not instruct the Fund to pay the amounts in the Benefits Statement as the benefits in payment are correct and this is all the Fund is allowed to pay.
3) The Secretary of State’s power 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 provisions governing the LGPS have been correctly applied in the circumstances.
4) The questions for decision: The questions you have asked the Secretary of State to decide are whether;
a) the Fund were guilty of maladministration in providing you with incorrect benefit statements;
b) the Fund were required to provide you with details of your AVC pension within a month of your retirement; and
c) the Fund were guilty of maladministration in the way that they handled stage 1 of the internal dispute resolution procedures.
5) Secretary of State’s decision: The Secretary of State has considered all the representations and evidence you submitted and has taken into account the appropriate regulations. He finds that:
a) the Fund acknowledge that in March 1996 they became aware that information XXX Council had earlier provided may be wrong and that it was not until January 1999 that this was clarified. As a result your 1997 benefit statement was incorrect and showed a higher level of benefits than was correct;
b) there are no provisions requiring the Fund to provide you with details about your AVC pension within one month of your retirement, but they are required to do so as soon as reasonably practicable; and
c) the way the first stage of the IDRP was handled was not part of your original disagreement which is what the Secretary of State is empowered to re-consider. The provisions relating to the Appointed Person's role are set out in regulations 100 and 101 of the 1997 regulations. Regulation 101(c) explains that the decision must be issued in writing within two months of receiving the application. The Appointed Person can extend this period (regulation101(2)). Where no extension is given within the prescribed period the original disagreement can be referred to the Secretary of State (regulation 102(9)).
6) Like the Appointed Person the Secretary of State has no powers to direct the Fund to act otherwise than in accordance with the provisions governing the LGPS. The Secretary of State has no power to order redress or award compensation even where it is shown that maladministration has taken place causing financial loss or injustice.
7) His decision confirms that made in part by the Appointed Person. The Secretary of State’s reasons and the regulatory provisions, which he considers apply in your case, are set out in the annex to this letter, which forms an integral part of his decision. He 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. 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 procedures. I am required to inform you of the role of the Pensions Advisory Service (OPAS) and the Pensions Ombudsman, although I note you are already aware of them. The Pensions Ombudsman may investigate and determine any complaint of maladministration or any dispute of fact or law referred to him in accordance with the Pension Schemes Act 1993. 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 0171 233 8080).
9) A copy of this letter has been sent to the Appointed Person, the Fund and XXX Borough Council.
1) The following evidence has been received and taken into account:
a) from you: letter dated 18 October 1999, with enclosures.
2) From the evidence submitted the following relevant points have been noted:
a) personal benefit statements were provided by the Fund for 1996 and 1997;
b) the Fund acknowledge that the 1997 benefit statement was incorrect;
c) this was due to conflicting information provided by XXX Council which was not resolved until January 1999;
d) you paid additional voluntary contributions (AVC);
e) your retired on 29 January 1999 and your benefits became payable immediately;
f) the Fund provided you with information about your AVC in a letter dated 4 March 1999.
3) You ask the Secretary of State to consider what you believe to be maladministration in relation to your pension. You explain that the personal benefit statements for 1996 and 1997 were incorrect. You acknowledge that the Fund and XXX Council have confirmed that your LGPS benefits have been calculated in accordance with the rules of the fund and you do not dispute this. You explain that OPAS have confirmed this. You believe that the Fund were required to provide information about your AVC within one month of your retirement.
4) The Fund have explained that they were informed when you started working for the council that you worked full-time. A Statutory Notice showing this information was issued to you and the council on 1 February 1989 but there is no trace on file that this was queried. In March 1996 the Fund were informed by the council that your hours had changed from 18½/35 to 25/35 per week. As this conflicted with earlier information, clarification was sought. The Fund received this in January 1999. They explain that the reason why you did not receive information about your AVC until 4 March 1999 was because your final payment did not reach your AVC account until 12 February 1999. Details were then obtained and issued to you as soon as possible.
5) The Secretary of State has considered all the evidence and has had regard to the regulations which, in his view, apply. He has first considered the question of incorrect information being provided in the annual benefits statement. There are no provisions in the rules governing the LGPS requiring the Fund to issue such statements. These are required under the Occupational Pension Scheme (Disclosure of Information) Regulations 1996 in relation to money purchase scheme but not in relation to final salary scheme such as the LGPS. The Secretary of State notes that the Fund acknowledge that the 1997 benefits statement was incorrect and explain the reasons why. He further notes that it is not disputed that your benefits have been calculated correctly. Therefore he concludes that the Fund complied with the rules governing the LGPS. Like the Appointed Person, the Secretary of State cannot direct the Fund to act otherwise than in accordance with these rules. Nor does he have any powers to order redress or award compensation even where maladministration is shown to have taken place causing financial loss or injustice.
6) The Secretary of State has next considered the question whether the Fund are legally required to provide information regarding an AVC within one month of the person retiring. Regulation 64 of the 1997 regulations states that the Fund must use the monies as soon as reasonable practicable for the provision of an additional pension. The Secretary of State concludes that there is no requirement in the rules governing the LGPS for them to provide information within one month of a member retiring.