LOCAL GOVERNMENT PENSION APPEAL

 

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)

 

1.                  I refer to your letter of 8 April 1999 in which you appeal (under regulation 102 of the 1997 regulations) on behalf of XXX (the council) to the Secretary of State for the Environment, Transport and the Regions against the decision of Mr XXX, the Appointed Person.

2.                  The Appointed Person revoked the decision of the the council not to allow the transfer of Miss XXX’s Free Standing Additional Voluntary Contributions (FSAVC) plan to a local government pension scheme (LGPS) in-house Additional Voluntary Contributions (IHAVC) scheme.  He found that while there are no specific powers in the regulations referring to such a transfer, they are not precluded by Inland Revenue (IR) Practice Notes, and if the IHAVC provider is prepared to accept a FSAVC transfer it cannot be refused by the council.  You maintain that specific powers are required within the LGPS to allow you to action such a transfer. 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 LGPS regulations have been correctly applied in the circumstances.

3.                  The question for decision: The question for decision by the Secretary of State is whether at the time of Miss XXX’s request to transfer her FSAVC to the council’s IHAVC, the council were empowered to arrange such a transfer.

4.                  The Secretary of State has considered all the representations and evidence as considered by the Appointed Person and supplied with your appeal.

5.                  Secretary of State’s decision: The Secretary of State has taken into account the appropriate regulations.  He finds that at the time of Miss XXX’s request the 1997 regulations did not provide for them to accept a transfer of a FSAVC to their IHAVC.  To that extent he allows the appeal.  His decision replaces that made by the Appointed Person.  However, he notes that the regulations have been amended, with effect from 20 May 1999, to provide that an active member may elect to transfer into his AVC scheme the accumulated value of any other AVC scheme to which he has subscribed.  The Secretary of State’s reasons and the regulatory provisions which he considers apply in thiscase are set out in the annex to this letter, which forms an integral part of this 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 but you may refer the matter to the Pensions Ombudsman or to the High Court.  Because of this the Secretary of State’s officials cannot discuss the case further.

6.                  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 0171 233 8080).

7.                  The Pensions Ombudsman may investigate and determine any complaint or dispute of fact or law in relation to the LGPS made or referred in accordance with the Pensions Schemes Act 1993.  His address is 11 Belgrave Road, London, SW1V 1RB (telephone number 0171 834 9144).

8.                  EVIDENCE RECEIVED

1.                  The evidence received from you with your letter dated 8 April 1999 has been taken into account.  This was also the evidence taken into account by the Appointed Person.

REGULATIONS CONSIDERED AND REASONS FOR DECISION

2.                  From the evidence submitted the following relevant points have been noted:

(a)               Miss D M XXX was a member of the LGPS administered by the council;

(b)               she had a FSAVC plan with XXX;

(c)               following a telephone request from Miss XXX on 16 February 1999 the council wrote to her refusing to transfer her FSAVC to an IHAVC;

(d)               on 4 March 1999 she appealed to the Appointed Person;

(e)               on 29 March the Appointed Person allowed her appeal; and

(f)                 with effect from 20 May 1999 the 1997 regulations were amended by The Local Government Pension Scheme (Miscellaneous Provisions) Regulations 1999.  These included a regulation to allow transfer of a FSAVC to an IHAVC.

3.                  The council decided not to accept inward transfer of Miss XXX’s FSAVC because they maintained that the 1997 regulations did not allow such a transfer.  Miss XXX maintained that she had been advised that other LGPS authorities had allowed similar transfers.  The Appointed Person upheld her appeal on the basis that while regulation 121 did not permit transfer of an FSAVC to the pension fund the 1997 regulations did not refer to transfer to an IHAVC fund; the IHAVC was for the relevant insurance company to manage and administer and the regulations did not apply to them; and IR rules do not prevent such a transfer.

4.                  The Secretary of State in reaching his decision has considered all the evidence and has had regard to the regulations which, in his view, apply.  For the purposes of an appeal he can only consider whether the 1997 regulations have been correctly applied at the time of the dispute.  It appears that Miss XXX formally requested the council to transfer her FSAVC to an IHAVC plan in February 1999 following correspondence with XXX and YYY Limited.  At that time the 1997 regulations applied and regulation 121 dealt with inward transfers of pension rights to be credited to the pension fund.  The regulation specifically excluded transfers of FSAVC’s.  There were no provisions covering the transfer of an FSAVC to an IHAVC.  In the Secretary of State’s view, the council had no powers under the regulations to accept such a transfer, and there was no over-riding legislation requiring them to do so.  However, regulation 60 of the regulations has since been amended with effect from 20 May 1999 to permit an active member to elect to transfer into his AVC scheme the accumulated value of any other AVC scheme to which he has subscribed.  Provided, therefore, that Miss XXX was an active member at 20 May 1999 she could so elect and council would now have the power to make the transfer.