ITEM PF16
PENSION FUND COMMITTEE – 13 DECEMBER 2007
PART TIME EMPLOYEES
Report by Assistant Chief Executive & Chief Finance Officer
Introduction
1. Circular 201 attached to this report (Annex 1) (download as .doc file) summarises the decisions published in respect of part time employees wishing to buy back membership of the Local Government Pension Scheme (LGPS). In Oxfordshire a register of some 530 individual scheme members, who might be able to backdate their membership, has been maintained whilst awaiting amending regulations, which have not been forthcoming. Therefore this report seeks the Committee’s approval to take action to resolve these three categories of remaining cases.
Background
2. The first group consists of Scheme members who joined the Local Government Pension Scheme (LGPS) prior to 1 April 1988, and who had the right to reckon as qualifying service any previous relevant part time employment back to 1 April 1974, allowing for gaps of up to 12 months. In instances where this membership was recorded, provided the scheme member worked at least 15 hours per week and had more than 1 year’s membership if they were a manual worker, Pension Services invited these scheme members to convert the qualifying service to reckonable service through the part time buy back arrangements. This was a one time only offer by selected invitation, although any scheme member subsequently found to fall into this category received the same invitation.
3. In 1995, cases started to be referred to Employment Tribunals (ET) because restricted admission to pension schemes was deemed to be discriminatory under equality legislation. As a result the policy detailed in the paragraph above was suspended, which resulted in the individuals held on the list waiting to finalise their pension provisions.
4. The second group consists of current scheme members working less than 15 hours per week and who therefore were disallowed entry to the scheme, but had registered their interest in part time buy back. These members were notified that their claim would be dealt with once amending regulations were issued.
5. The third group is again made up of scheme members who worked less than 15 hours per week and were disallowed entry to the scheme. However, this group are no longer active scheme members and should have been notified that they would have to make a claim to the ET within six months of leaving employment to pursue their claim.
Proposals
6. For the first group of staff, the Council does have power under the existing Regulations to offer back membership. In light of the decisions to date, and in the absence of any further regulations, it is now proposed to write to all group one members to offer them the opportunity to buy back membership. It is proposed that the LGE formula (set out in circulars 152 and 164) is used to calculate the back membership offer.
7. The employee would be required to meet the cost of contributions plus interest element. Employer costs would be met through the 2010 Valuation process as increasing liabilities.
8. For the second group of scheme members they can now be advised that no regulations are expected and as such we have no statutory powers to offer back membership. As active scheme members, they therefore have the option to lodge their claim with the ET, who do have the power, on an individual case basis, to require the Fund to offer back membership. It is proposed that we write to this group accordingly.
9. However for the third group of scheme members who have already left employment, there is no option to make a claim via the ET outside of the six month limit for such claims. The only option for these individuals is to make a claim for maladministration and seek compensation for their losses, particularly where they can argue we failed to bring their attention to the fact that they should have started an ET case within 6 months of leaving.
10. Where we are contacted, Pension Services will need to advise previous scheme members that they can make a complaint under the Internal Dispute Resolution Procedure (IDRP). In choosing this route it would allow each case to be individually assessed and where it is considered that the member did not have sufficient information to make an earlier decision to join the LGPS then they could be allowed to do so (although this decision will have to be made by the Pensions Ombudsman, as only they have the power to require the Fund to act outside the terms of the current Regulations).
Financial and Staff Implications
11. In instances where there is a buy back, employees will pay the cost of their contributions plus interest. Employer contributions, as previously stated, will be picked up as part of the 2010 valuation process.
12. The actuaries have advised that work can be taken between valuations to determine the impact of the buy back feeding into the 2010, if this is wanted.
13. This project will be managed within current resources taking into consideration the workload arising from regulatory changes.
RECOMMENDATION
14. The Committee is RECOMMENDED to approve the approach detailed in the report to resolve these outstanding cases.
SUE SCANE Assistant Chief Executive & Chief Finance Officer
Background papers: LGE Circular 201
Contact Officer: Sally Fox, Pension Services Manager – Community Safety Tel: (01865) 797111
November 2007
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