Local Government Pension Scheme Appeal Determination By The Secretary of State

Our Ref: LGR 79/2/370

DATE: 30 SEPTEMBER 1998

SUPERANNUATION ACT 1972

LOCAL GOVERNMENT SUPERANNUATION REGULATIONS 1986 (“the 1986 regulations”)

THE LOCAL GOVERNMENT PENSION SCHEME REGULATIONS 1995 (“the 1995 regulations”)

1. I am directed by the Secretary of State for the Environment, Transport and the Regions to refer to your notice of appeal submitted under regulation J5 of the 1995 regulations against the decision of the XXXs (“the company”) that you are not entitled to the payment of ill-health retirement benefits with enhancement under regulation E2(1)(b)(i) of the 1986 regulations, prior to the sale of the company on 7 August 1993.

2. The appeal has been conducted by correspondence. Consideration has been given to your appeal form dated 19 September, to your letters of 25 October and 19 December 1996, your undated letters received on 9 May and 11 September 1997; to the company’s letters of 11 and 22 November 1996, 24 April and 25 June 1997; to XXX County Council’s (“the council”) letters of 15 January, 1 May and 9 June 1997; and to all the copy correspondence enclosed with those letters.

3.The question for determination is whether when your contract of employment was transferred to the company following privatisation you were incapable of carrying out efficiently your duties by reason of permanent ill-health or infirmity of mind or body.

4. From the evidence submitted the following facts have been established:

(a) you are aged 59;

(b) you were employed by the company from 1 May 1978;

(d) on 16 March 1993 you sustained an injury to your back during the course of your work, and following this incident you commenced a period of sickness absence and did not return to work;

(e) in May 1993 you applied for ill-health retirement, and received a quotation from the council, the figures included an enhancement of 6_ years;

(f) on 2 July 1993 you were examined by Dr XXX, Medical Director of the XXX Occupational Health Service, who was of the opinion that your condition was not permanent and ill-health retirement was not appropriate;

(g) on 7 August 1993 the company was privatised and your contract of employment was transferred; following privatisation you did not join the company’s pension scheme or request your pension benefits to be transferred to the new scheme;

(h) on 30 September 1993 you wrote to the company with an accompanying letter from Dr K E XXX, your GP, applying to be retired due to ill-health;

(i) on 6 October 1993 the company accepted your application and you retired on 31 December 1993 due to permanent ill-health;

(j) you were awarded early release of your preserved LGSS pension benefits on ill-health grounds without enhancement from the council; and

(k) on 19 September 1996 you appealed to the Secretary of State on the grounds that you should have been awarded ill-health retirement benefits with enhancement.

5.You maintain that you sustained your back injury and made your initial application for ill- health retirement prior to the privatisation of the company, you also maintain that you were not advised by anyone, on matters regarding your pension, when the company became privatised. The company state you first mentioned ill-health retirement during May 1993, however at that time XXX Occupational Health Service were of the opinion that ill-health retirement was not appropriate. The company further maintain the issue was again raised in late September 1993, when at that time medical grounds were supported. The company comment that all company employees were provided with detailed information by both the council and the company’s pension administrators. They maintain you were provided with all the documentation and invited to attend the presentations on the pension issue.

6. The Secretary of State has considered all the representations and evidence. He is required to determine the same question, as to your rights under the regulations, as was decided in the first instance by the company. He is acting judicially and has no power to modify the application of the regulations to the facts of the case.

7. Regulation E2(1)(b)(i) of the 1986 regulations makes no reference to any positive act that brings employment to an end either by the employer giving notice, the employee voluntarily resigning, or transfer of work to another body. It is considered that in order to satisfy the requirements of the regulations it must be shown that you were suffering from ill-health or infirmity of mind or body so as to be incapable of carrying out duties as a Security Officer at the time your local government employment ceased on 7 August 1993. If it is found that such a condition existed, either at the time your employment was transferred, or at an earlier date, it will be necessary to establish that it was permanent in the sense required by the regulations. In order to qualify for enhancement of these benefits under schedule 9, reckonable service must be not less than 5 years as required by regulation E3(12)(c).

8. You declined to attend an independent medical examination requesting that your appeal be determined on the current evidence available to the Secretary of State.

9. The Secretary of State notes that on 2 July 1993, Dr XXX considered that although you were still experiencing pain and stiffness in your back, you were making good progress and your examination on that day was good considering that it was only three months since your back problem had developed. Dr XXX felt that in the vast majority of cases of back pain such as your own, full recovery would be expected within six months. Dr XXX commented that you were not fit for your duties as a Security Officer on the date of examination but you would be within three months. Dr XXX concluded that your condition was not permanent and ill-health retirement was therefore not appropriate. Dr XXX, your GP, wrote to Mr XXX, at the company, on 30 September 1993, stating that you had attended physiotherapy for exercises and that your response to the treatment had plateaued at 75-80% improvement. Dr XXX commented that you experienced backache on walking and sitting for half an hour and he felt it was appropriate that as your level of improvement had now stabilised below that needed to return to your duties, you should be retired on medical grounds.

10. The Secretary of State notes that it was accepted by all the parties that by October 1993 your ill-health was permanent. He takes the view that the medical evidence suggests that the improvement expected in July 1993 did not materialise, at least not sufficiently to enable you to return to work.

11. Taking all the medical evidence into account and based on the balance of probabilities, he concludes that it is more likely than not, that on 6 August 1993 you were incapable of carrying out your former duties by reason of permanent ill-health, although this view may not have been entirely evident and conclusive at that date. He therefore allows your appeal and determines that under the provisions of regulation E2(1)(b)(i) of the 1986 regulations you are entitled to an annual retirement pension and lump sum retiring allowance with enhancement under schedule 9.

12. The above constitutes the Secretary of State's determination of this case. Having made his determination the Secretary of State has no power to alter it unless instructed to by the Pensions Ombudsman or the High Court. Because of this, officials may not discuss the matter further.

13. The Pensions Ombudsman may investigate and determine 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).