683      INDEX

Our Ref.: LGR 85/18/231

31 January 2000

 

 

LOCAL GOVERNMENT PENSION APPEAL

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT SUPERANNUATION REGULATIONS 1986 (the 1986 regulations)

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1995 (the 1995 regulations)

LOCAL GOVERNMENT PENSION SCHEME (TRANSITIONAL PROVISIONS) REGULATIONS 1997 (the transitional regulations)

LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)

1.                  I refer to your letter of   4 October 1999 in which you appeal (under regulation 102 of the 1997 regulations) on behalf of Mr XXX to the Secretary of State for the Environment, Transport and the Regions against the decision of Ms XXX, the Appointed Person in relation to Mr XXX’s local government pension scheme (LGPS) dispute with XXX (the council).

2.                  The Appointed Person upheld the council’s decision      that a death grant in respect of Mr XXX (Mr XXX’s brother) could not be paid in accordance with the information previously provided to him.  She found that because Mr XXX became entitled to deferred benefits before 1 April 1998 he was not entitled to benefits allowed under the 1997 regulations.  The dispute arose because the information provided to Mr XXX by the council about his estate’s entitlement to payment of benefits on his death related to benefits that were only available under the 1997 regulations.  Mr XXX died on 19 March 1999 and Mr XXX applied to the council for payment of benefits based on a letter dated 31 July 1998 from the council to Mr XXX. The letter was to inform him of early payment from 23 February 1998 of his deferred benefits on his retirement on ill-health grounds.  Attached to the letter were notes indicating entitlement to pensioner’s death grant of “a lump sum equal to the first five years’ pension payments less any pension already paid” if death occurred within five years of retirement.

3.                  The question for decision: In your appeal you do not dispute the calculation of Mr XXX’s death grant, in that no evidence has been submitted to show how death grant was calculated; rather your dispute centres on the information sent to Mr XXX by the council indicating death grant provision based on the 1997 regulations rather than the 1995 regulations.  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 provisions governing the LGPS have been correctly applied in the circumstances.  Like the Appointed Person the Secretary of State has no powers to direct a local authority to act outside the provisions of the regulations.  The question for the Secretary of State to decide is whether the council can pay a death grant in relation to Mr XXX in line with their letter of 31 July 1998.

4.                  The Secretary of State has considered all the representations and evidence.  Copies of documents supplied by the Appointed Personwere sent to you under cover of the department’s letter of 3 December 1999.

5.                  Secretary of State’s decision: The Secretary of State has taken into account the appropriate regulations.  He finds that the council cannot pay a death grant in line with the information supplied to Mr XXX on 31 July 1998, for the following reasons.  After more than eighteen years pensionable service in the local government superannuation scheme (now the LGPS) the council made Mr XXX redundant in 1990.  His pension benefits were then deferred as provided by the 1986 regulations.  With deferred entitlement (payment of his benefits were deferred until he retired) his personal representatives were entitled if he died to a lump sum death grant by virtue of regulation E11(1)(d).  When the 1995 regulations replaced the 1986 regulations on 2 May 1995 this entitlement continued unaltered under regulation E2 of these regulations.  That is, both the 1986 and the 1995 regulations entitled his personal representatives to a lump sum death grant equal to his pensionable remuneration when he was made redundant.  When his deferred retirement benefits were put into payment from 23 February 1998 the death grant entitlement became subject to regulation E3(3).  This had the effect of immediately deducting his lump sum retirement grant from his death benefit and then progressively deducting from his remaining death benefit entitlement his retirement benefits as they were paid.  On 1 April 1998 the 1997 regulations came into force introducing death grant for pensioners of five years pension less pension already paid (regulation 38(5)).  The transitional regulations enacted at the same time as the 1997 regulations provide for transitional and continuing provisions from the 1995 regulations.

6.                  The benefits set out in 1997 regulations, including death grants, only apply to active members of the LGPS.  Active members were those contributing to the LGPS on the day the 1997 regulations came into force.  By virtue of regulation 4 of the transitional regulations, the previous regulations continued to apply to deferred members and pensioners.  Therefore, Mr XXX’s representatives were not entitled to death grant under the 1997 regulations.  Regulation E3(3) of 1995 regulations applied to the calculation of Mr XXX’s death grant despite the enactment before his death of the 1997 regulations on 1 April 1998.  The Secretary of State notes that on 31 July 1998, when the council informed Mr XXX of his pension benefits, they enclosed notes that indicated the provision of death grant as under the 1997 regulations.  The Secretary of State accepts that the council sent misleading information.  However there are no provisions to award compensation where claims are made that incorrect information has been provided with regard to the LGPS, even where it is shown that maladministration has taken place leading to financial loss or injustice.

7.                  The Secretary of State’s decision confirms the content of the Appointed Person’s decision.  The Secretary of State 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 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).

9.                  The Pensions Ombudsman may investigate and determine any allegation of maladministrationcomplaint 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).