822 INDEX
LOCAL GOVERNMENT PENSION SCHEME APPEAL
SUPERANNUATION ACT 1972
LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1997 (the 1997 regulations)
1) I refer to the letter of 9 June 2000 from XXX, Solicitors, in which they appealed (under regulation 102 of the 1997 regulations), on behalf of Mr XXX, against the decision of Mr XXX, the Appointed Person for XXX Council, in relation to Mr XXX’ local government pension scheme (LGPS) dispute with the administering authority (XXX Council (the council)). This letter has been sent to you as you explained in your letter of 10 October 2000 that you are now acting on behalf of Mr XXX in this matter.
2) The Appointed Person found that the council “… has absolute discretion in deciding to whom any death grant it to be payable and I have therefore resolved that your [Mr XXX] appeal be not allowed.”.
3) The question for decision: The question for decision by the Secretary of State is whether the council acted unreasonably or improperly in deciding not to pay the death grant to Mr XXX.
4) Secretary of State’s decision: The Secretary of State finds that the council did not act unreasonably or improperly in reaching their decision not to make payment of a death grant to Mr XXX. The Secretary of State dismisses your appeal. His decision confirms the effect of the Appointed Person’s 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 or Mr XXX about the decision. The decision is biding and can only be overturned by a judgement of the High Court or the Pensions Ombudsman.
5) The Pension Advisory Service (OPAS) is available to assist members and beneficiaries in connection with difficulties they have failed to resolve. Their address is 11 Belgrave Road, London, SW1V 1RB (telephone 020 7233 8080).
6) The Pensions Ombudsman may investigate and determine any complaint of maladministration or any dispute of fact or law made or referred in accordance with the Pension Schemes Act 1993. His address is 11 Belgrave Road, London, SW1V 1RB (telephone 020 7834 9144).
7) Copies of this letter have been sent to the Appointed Person and the council.
Yours faithfully
1) The following evidence has been received and taken into account:
a) from XXX, Solicitors: letter dated 9 June 2000 (with attachments);
b) from Mr XXX: letter dated 25 July 2000 (with attachments)
c) from the Appointed Person: letter dated 2 August 2000 enclosing copies of the documents considered by him and listed in the “List of Documentation Enclosed” (copied to XXX, Solicitors, with the Department’s letter of 4 August 2000); and
d) from you: letter dated 10 October 2000.
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 council to act outside the provisions of the regulations. The question that XXX, Solicitors, referred to the Appointed Person was whether it was unjust of the council to ignore the uncancelled nomination and pay the lump sum to the executors.
3) It is a matter for the council’s discretion whether or not to make payment of a death grant to the nominated person(s) or to any person appearing to be a relative or descendant of the deceased. The Secretary of State will not under the 1997 regulations replace a decision where the council have exercised a discretion. His role is, rather, to ensure that the discretion has not been exercised unreasonably, improperly and, in cases where it has, to determine that the matter should be reconsidered in a proper manner.
4) From the evidence received the following points have been noted:
a) Mrs XXX signed a form entitled “NOMINATION OF A BENEFICIARY TO RECEIVE ANY LUMP SUM DEATH GRANT PAYABLE IN ACCORDANCE WITH THE ABOVE REGULATIONS” on 19 April 1997, which named XXX;
b) She indicated on this form that she wished him to receive 100% of the death grant;
c) She signed a will on 22 September 1999;
d) She signed a will on 28 September 1999, which revoked all former wills and dispositions;
e) On 5 October 1999 she died;
f) The council decided that “… given the existence of a Will made subsequent to the nomination, it has been decided that the monies should in accordance with those regulations be paid to the personal representative of the deceased.”.
5) Mr XXX maintains that his wife made her will without cancelling the nomination. If she had intended to cancel the nomination she could have done so at any time or done so in her will which made no reference to the pension scheme entitlements. He considers that in making her will Mrs XXX must have taken the nomination into account. Furthermore it would be totally unjust for the council to ignore the uncancelled nomination and pay the lump sum to the executors which would mean that he will get no benefit or have to sue the estate. He considers the council’s refusal to comply with the clear directions in the nomination is unjust and perverse. Mr XXX points out that in the will of 22 September 1999 he was the main beneficiary. He considers that at the time she made the will of 28 September 1999 she was critically ill and heavily sedated and that she did not know what she was doing. Mr XXX also points out that in a letter dated 2 February 2000 from XXX, Solicitors who are acting in respect of the estate, state “if it is the case that the nomination has been properly made and not revoked we would accept Mr XXX has a claim”.
6) You believe there is an issue of importance in principle in this case. You consider Mrs XXX made her position clear as to whom she wished to receive any death grant, that she was aware she was suffering from a terminal illness and knew therefore that the death grant would be payable. You consider it can be assumed that if she had wished to change this she would have taken steps to ensure that the intention was made clear. You state “It is not in dispute that Mrs XXX clearly contemplated who should receive any death grant when she made her nomination”. You consider the council’s decision “… is perverse in that is assumes that somehow Mrs XXX would not have wished that intention to be put into effect”. You do not believe that can be right or just. “We appreciate that there is a discretion but that discretion is not being exercised judicially and we feel that it is open to judicial review.”. You consider there is one other issue of considerable significance. In a letter dated 2 February 2000 from XXX, Solicitors who are acting in respect of the estate, you point out that they state “however, we will say, without prejudice, if it is the case that the nomination has been properly made and not revoked, we would accept that Mr XXX has a claim”. It appears to you that this is “… an acceptance by the solicitors that the presumption should be in favour of an unrevoked nomination being upheld as opposed to a payment being made to the personal representatives where clearly there is no evidence of any intention of Mrs XXX that she wished such payment to be made.”.
7) The Appointed Person determined “… that the administering authority has absolute discretion in deciding to whom any death grant is to be payable …”. He resolved that Mr XXX’ appeal be not allowed. The Secretary of State considers the Appointed Person was wrong in reaching his decision in relying on “absolute discretion” being effectively unchallengeable. The Secretary of State takes the view that he should have examined whether their decision was reasonable in the circumstances.
8) The Secretary of State in reaching his decision has had regard to the regulations which, in his view, apply. Regulation 38(1) of the 1997 regulations gives an administering authority the power to make, at their absolute discretion, payments to or for the benefit of the member’s nominee or personal representatives or any person appearing to the authority to have been his relative or dependant at any time.
9) The Secretary of State has carefully considered all the representations and evidence submitted to him. He notes that Mrs XXX on 19 April 1997 signed a form naming Mr XXX as the person to receive the death grant and that she did not cancel this. The form Mrs XXX signed is headed “NOMINATION OF A BENEFICIARY TO RECEIVE ANY LUMP SUM DEATH GRANT PAYABLE IN ACCORDANCE WITH THE ABOVE REGULATIONS”. There are no provisions in the 1997 regulations which require a member to provide either a nomination or an expression of wish (the latter being one of the subsequent factors to be taken into account by the relevant authority in deciding how it is to dispose of any death grant payable). Although the form used is headed “nomination” it appears that the council treated it as an expression of wish in exercising their powers of absolute discretion.
10) The Secretary of State notes that on 10 January 2000 the council’s Director of Corporate Administration wrote to XXX, Solicitors, stating “… As you will have noted, the position under those regulations is that the Administering Authority has absolute discretion in the matter. … In the particular circumstances of this case, given the existence of a Will made subsequent to the nomination, it has been decided that the monies should in accordance with those regulations be paid to the personal representative of the deceased.”.
11) In considering whether the council’s decision was reasonable, the Secretary of State notes that the ordinary duty which the law imposes on a body which is entrusted with exercising a discretionary power is that they exercise it for the purpose for which it was given, giving proper consideration to matters which are relevant and excluding from consideration matters which are irrelevant. Their decision must not be so arbitrary or irrational that no reasonable person would, on the facts of the case, have come to it. And they must not breach the scheme rules.
12) The Secretary of State is satisfied that the council have not breached the scheme rules, and that they have also exercised their discretion for its given purpose. He has considered whether they gave proper consideration to relevant matters and disregarded irrelevant ones. The facts are that Mrs XXX nominated her husband for death grant on 17 April 1997, apparently made a will largely in his favour on 22 September 1999, made a will largely cutting him out on 28 September 1999 (the will which stands in law), and died on 5 October 1999. The Secretary of State notes that the council clearly took account of the will dated 29 September 1999; they decided to pay the death grant to her estate because the will was made subsequent to her death benefit form. The Secretary of State has had to decide whether this will was relevant, and whether they took proper account of the death benefit form. In the Secretary of State’s view, both were relevant considerations, but he is satisfied that the evidence shows that the council took both into account in reaching their decision, while according them different weight. It does not appear to him that the council took irrelevant matters into account, and he finds no evidence that they failed to consider the representations made to them.
The Secretary of State has had to consider whether a decision to pay the death grant into the estate was so arbitrary and irrational that no reasonable person could, on the facts of the case, have come to it. Effectively, the council made a choice between paying the death grant to the spouse and paying it to the estate. The death benefit form signed by Mrs XXX dated 19 April 1997 naming Mr XXX shows with certainty what her intentions were at that date. But in the Secretary of State’s view, it would not have been possible for the council to construe with such certainty what Mrs XXX’ intentions were as regards the death benefit when she made her final will, given the circumstances and content of that will, even though she did not cancel her earlier form. In the Secretary of State’s view it is difficult to draw a conclusion that paying the grant into the estate was in the circumstances so arbitrary and irrational that no reasonable person could have made such a decision.