LOCAL GOVERNMENT PENSION APPEAL

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)

 

1.                  I refer to your letter dated 1 September 1999 in which you appeal (under regulation 102 of the 1997 regulations), on behalf of Mr XXX, against the decision of Mr XXX, the Appointed Person for XXX Fund, in relation to his local government pension scheme (LGPS) dispute with XXX Council (the council).

 

2.                  The Appointed Person found that because Mr XXX’s employment with the council was terminated due to redundancy, he did not satisfy the requirements of the LGPS regulations for immediate payment of ill-health retirement benefits with enhancement from when he ceased employment with the council.

 

3.                  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 council to act outside the provisions of the regulations.  The disagreement you referred to the Appointed Person was whether the council should have granted Mr XXX ill-health retirement benefits with enhancement when his employment was terminated on 15 May 1998.

 

4.                  The question for decision: The question for decision by the Secretary of State is whether Mr XXX ceased employment with the council on 15 May 1998 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 qualifies for the immediate payment of his LGPS benefits with enhancement.

 

5.                  Secretary of State’s decision: The Secretary of State has considered all the representations and evidence, and has taken into account the appropriate regulations.  He finds that for the purposes of the 1997 regulations, Mr XXX did not cease employment with the council on 15 May 1998 because he was permanently incapable of discharging efficiently the duties of that employment by reason of ill-health or infirmity of mind or body.  He does not, therefore, qualify for the immediate payment of his LGPS benefits with enhancement from that date.  His decision confirms that made by the Appointed Person.  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.  The decision is binding and can only be overturned by a judgement of the High Court or the Pensions Ombudsman.

 

6.                  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 allegation of maladministration or any complaint or dispute of fact or law in relation to the local government pension scheme.  His address is 11 Belgrave Road, London, SW1V 1RB (telephone number 0171 834 9144).

 

EVIDENCE RECEIVED

 

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

 

a)                   from you: letters dated 1 September (with enclosures) and 30 September 1999; and

 

b)                  from the Appointed Person: documents considered by him (list enclosed in the Department's letter dated 15 September 1999).

 

REGULATIONS CONSIDERED AND REASONS FOR DECISION

 

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

 

a)                  Mr XXX’s date of birth is 5 April 1951;

 

b)                  he was employed by the council as a Unit Supervisor;

 

c)                  he was a member of the LGPS;

 

d)                  in September 1997 he commenced a period of extended sickness absence;

 

e)                  his post was declared redundant;

 

f)                    he ceased employment with the council on 15 May 1998; and

 

g)                  his deferred pension benefits were brought into payment from the day following his redundancy.

 

3.                  You contend that: as Mr XXX was and is suffering from a longstanding illness; he had not worked due to this for many months; his prognosis was extremely poor and within the prognosis period he was declared permanently incapable; in effect his incapacity had been continuous from the beginning of his illness.

 

4.                  The Appointed Person determined that "Having taken into account the appropriate regulations I find that in the light of the medical evidence and on the balance of probability, your employment was not terminated by reason of your being permanently incapable of discharging efficiently the duties of that employment because of ill-health or infirmity of mind or body.  Your employment was terminated by reason of redundancy as a result of a re-organisation of the management structure of your department …”.

 

5.                  The Secretary of State in reaching his decision has had regard to the regulations, which, in his view, apply.  At the time Mr XXX 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 performing their duties efficiently due to ill-health or infirmity of mind or body.  The Secretary of State takes the view that for an incapacity to be permanent it would have to be unlikely to improve sufficiently for Mr XXX to perform the duties of his former employment efficiently before his normal retirement age when LGPS benefits must, in any case be paid.

 

6.                  The questions to be decided therefore are whether, on 15 May 1998, Mr XXX was permanently incapable due to ill-health of performing his duties efficiently, and whether he ceased his employment as a result.

 

7.                  The Secretary of State notes that on 17 March 1998 Dr XXX, the council’s Occupational Health Advisor, certified that Mr XXX was unfit for the foreseeable future and that the prognosis of return to work in the following 6/12 months was poor.  He also notes that on 27 April 1998 Dr XXX confirmed that his opinion remained unchanged.  The Secretary of State takes the view therefore that at the time his employment with the council ceased on 15 May 1998, Mr XXX was suffering from ill-health.  However, his employer did not at that time consider his condition to be permanent.  The Secretary of State notes that the medical examiner for the XXX Fund issued a medical certificate, on 5 November 1998, to the effect that Mr XXX’s incapacity was permanent, and that the date he first became unfit was 16 May 1998.  The fund put his deferred benefits into effect from this date.  The Secretary of State takes this evidence to imply that Mr XXX was subsequently recognised to have been permanently incapable, within the meaning of the regulations, on the day after he ceased employment, and that this is not a matter of contention.

 

8.                  The issue the Secretary of State has to resolve, therefore, is whether Mr XXX’s permanent incapacity was the cause of his cessation of employment.  The Secretary of State notes that the council sent Mr XXX a letter dated 6 February 1998 giving him notice of termination of his contract on grounds of compulsory redundancy with effect from 1 May 1998 as a result of management restructuring.  On 29 April 1998 the council offered him a temporary post and a consequent delay in the implementation of his dismissal.  On 5 May 1998 Mr XXX reported for duty in that temporary post, but then declared himself unfit for the duties of that position.  A termination letter was sent to Mr XXX on 13 May 1998 confirming that he was dismissed from his employment with the council with effect from 15 May 1998 because his previous post was made redundant due to restructuring and alternative employment was not suitable.

 

9.                  The Secretary of State concludes from this correspondence that the reason for Mr XXX’s termination of employment was redundancy.  He did not cease on grounds of ill-health.  The Secretary of State's powers on appeal are limited to considering whether the rules governing the LGPS have been correctly applied.  The reason for the termination of Mr XXX’s employment with the council is an employment issue and once it has been established it is not one the Secretary of State has any power to alter in the context of a pensions appeal.

 

10.              The Secretary of State concludes that Mr XXX does not qualify for immediate payment of pension with enhancement under regulation 27 from the time his employment with the council ceased because his cessation was not caused by his ill-health.  He has accordingly decided that his appeal has to be dismissed.