SUPERANNUATION ACT 1972

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)

1. I refer to your letter dated 3 July 2000 in which you appeal (under regulation 102 of the 1997 regulations), against the decision of Mr XXX, the Appointed Person for XXX Council (the council), in relation to your local government pension scheme (LGPS) dispute with the council.

2. The Appointed Person found that you did not satisfy the requirements of the LGPS regulations for immediate payment of LGPS benefits from when your employment with the council was terminated.

3. The question for decision: The question for decision by the Secretary of State is whether you ceased employment with the council on 20 July 1999 by reason of being permanently incapable of discharging efficiently the duties of that employment because of ill-health or infirmity of mind or body, and so qualify for immediate payment of your LGPS benefits.

4. Secretary of State’s decision: The Secretary of State has considered all the representations and evidence, and has taken into account the appropriate regulations. Based on the balance of probabilities, he finds that for the purposes of the 1997 regulations, it has not been shown conclusively that you ceased employment with the council on 20 July 1999 because you were permanently incapable of discharging efficiently the duties of that employment by reason of ill health or infirmity of mind or body.

5. The Secretary of State’s decision confirms that made by the Appointed Person although because the reasons for the decision are different it technically replaces it.

6. The Secretary of State’s reasons and the regulations which 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.

7. 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 020 7233 8080).

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

EVIDENCE RECEIVED

1. The following evidence has been received and taken into account:

a) from you: letters dated 3 July 2000 (with enclosures), 14 August 2000 (with enclosures) and 9 September 2000 (with enclosure);

b) from the Appointed Person: documents considered by him (list enclosed in the Department’s letter dated 3 August 2000);

c) from Mr XXX: letter dated 23 August 2000 (with enclosures)(copies sent to you with the Department’s letter dated 6 September 2000).

THE SECRETARY OF STATE’S POWERS

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. 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 Secretary of State has no powers to direct the company to act outside the provisions of the regulations. The disagreement you referred to the Appointed Person was whether the council should have granted you ill-health retirement benefits when your employment was terminated.

REGULATIONS CONSIDERED AND REASONS FOR DECISION

3. From the evidence submitted the following points have been noted:

a) your date of birth is 9 July 1958;

b) you were employed by the council as a Care Manager in the Social Services Department;

c) you were a member of the LGPS;

d) on 4 June 1998 the council wrote to you informing you of a departmental re-organisation process;

e) on the 17 September 1998 the council notified you that you had not been successful in attaining a post as Care Manager following the re-organisation of the department;

f) you appealed against the council’s decision;

g) you commenced an extended period of sickness absence on 2 December 1998;

h) you were employed by the council as a Social Worker from 11 January 1999;

k) your employment was terminated on the 20 July 1999 by reason of a mutual agreement between you and the council;

l) the council determined you were not eligible for ill-health retirement benefits on 21 July 1999; and

m) you appealed to the Appointed Person on 7 October 1999.

4. You maintain that you suffered an illness that would prevent you from working for the council permanently and therefore qualify for ill-health retirement. You consider that bullying and harassment resulted in your illness. You state that you consider anyone permanently unable to do their job because of a management problem has a prima facie entitlement to ill-health benefits. You contend that the Appointed Person’s decision states that your ill-health was not permanent and that it fails to state this in relation to your employment with the council which you consider the regulations require. You state that Dr XXX refused to sign a declaration that he considered you qualified for ill-health retirement on the grounds that you were suffering from stress and if he signed such a declaration everyone would want to leave. You contend that Mr XXX told a XXX representative that the council would not terminate your employment on the grounds of ill-health as the pension fund could not afford it. You state that the council did not identify the criteria on which their decision not to grant you ill-health retirement was based and that they did not provide you with information about the appeals procedure or details of the Appointed Person.

5. The Appointed Person determined that “…I conclude that the prognosis made by the Occupational Health Consultant was correct, namely that your illness was not permanent. That being so there was no basis on which the Council could award an ill-health pension.”

6. The Secretary of State notes that you contend Dr XXX refused to sign a certificate of permanent ill-health stating that you were suffering from stress and if he signed such a certificate everybody would want early retirement. The Secretary of State finds that no objective evidence has been submitted to him which supports this contention.

7. The Secretary of State notes that you contend Mr XXX told a XXX representative that the council would not terminate your employment on ill-heath grounds because the pension fund could not afford it. The Secretary of State considers that no evidence has been submitted to him to support this contention.

8. The Secretary of State notes that you have been awarded incapacity benefit by the DSS. He takes the view that benefits awarded by the DSS are not conclusive in determining the award of LGPS benefits, as the tests to be applied are different.

9. The Secretary of State has considered the additional letters submitted from your General Practitioner, Dr XXX dated 7 September 2000 and from your Counsellor in Primary Care, Ms XXX dated 14 August 2000. The Secretary of State does not normally consider such evidence as his role under the regulations is to reconsider the original agreement referred to the Appointed Person. However, in his view this evidence does not materially alter the facts of this case.

10. The Secretary of State in reaching his decision has had regard to the regulations, which, in his view apply. At the time you ceased employment the 1997 regulations were in force. Regulation 27 of the 1997 regulations provides for a member’s pension and retirement grant to be paid immediately, with enhancement where applicable, where they cease employment because they are permanently incapable of efficiently discharging their former duties, or any other comparable employment with the council, due to ill-health or infirmity of mind or body.

11. The Secretary of State notes that for your incapacity to be permanent the regulations require that it would have to be unlikely to improve sufficiently for you to discharge efficiently the duties of your former employment, or any other comparable employment with the council, before you reach age 65.

12. The Secretary of State notes that regulation 27 gives an entitlement to benefits where two major criteria are satisfied. There is the medical criterion, which under regulation 97 must be certified by an independent registered medical practitioner who is qualified in occupational health medicine, that the member is permanently incapable of performing his former duties efficiently because of ill-health or infirmity of mind or body. That on its own, however is not sufficient to qualify for benefits. There is also the requirement that employment must cease on that account. The later criterion – the reason why employment ceases – is an employment matter. The 1997 regulations are about entitlement to benefit where certain employment conditions are satisfied. They do not themselves apply those employment conditions. Your employment was terminated on 20 July 1999 on the grounds of a mutual agreement, with a payment paid as compensation for loss of employment. Such a payment can only lawfully be made where termination of employment is by reason of “redundancy” as defined in regulation 26 of the 1997 regulations. The payment of such compensation was governed, at the time, by separate powers in the Local Government (Discretionary Payments) Regulations 1996. It is clear from the evidence, and it follows from this payment, that your termination of employment was on grounds of redundancy within the meaning of the regulations, and not on the grounds of ill-health. The Secretary of State concludes that at the time you ceased employment, therefore, you had no entitlement to ill-health retirement benefits. Decisions whether, why and when to terminate employment are employment decisions, not pensions ones taken under the provisions in the LGPS regulations, the Secretary of State, therefore, has no powers to consider such decisions on appeal.

13. However, regulation 31 provides for a member with a deferred pension benefit to elect to have that benefit put into payment if after ceasing employment he becomes permanently incapable of efficiently discharging his former duties because of ill-health. The Secretary of State has considered whether the evidence indicates that, immediately after ceasing employment, you were so incapable.

14. The Secretary of State has noted all the medical evidence submitted to him, comprising: letter from Dr XXX dated 7 September 2000; letter from Dr XXX, Consultant Occupational Physician, dated 24 November 1999; letter from Ms XXX, Counsellor in Primary Care, dated 14 August 2000; and Med 3 certificates signed by Dr XXX on the following dates: 7 December 1998, 21 December 1998, 15 January 1999, 16 February 1999, 15 April 1999, 15 June 1999 and 13 August 1999.

15. He considers that the evidence taken as a whole suggests that managerial issues between the council and you may have contributed to or resulted in your ill-health and subsequent extended sick leave from 2 December 1998. In your appeal to the Appointed Person you state “Because of serious persistent victimisation and harassment by senior officers of the XXX council, my mental health was affected to the point of being forced to give up my job.”

16. However, the Secretary of State does not consider that the medical evidence taken as a whole conclusively shows that you were and would remain incapable of discharging efficiently the duties of your former employment until age 65 when you ceased employment. Therefore he concludes that you did not qualify for the early payment of LGPS benefits under regulation 31. However, should you believe you have medical evidence to show that you subsequently become so incapable, it is up to you to submit that evidence to the council and elect to receive your benefits. The council will be required, in reaching a decision whether you are entitled, to refer the medical question to an independent registered medical practitioner qualified in occupational health, for a decision.