Greater Manchester Pension Fund · CAS-44381-K1J8

CAS-44381-K1J8

Ombudsman’s Determination Applicant Mr F

Scheme Greater Manchester Pension Fund (the Scheme)

Respondents Tameside Metropolitan Borough (the Administrator)

Manchester City Council (the Council)

Outcome

Complaint summary

Background information, including submissions from the parties The sequence of events is not in dispute, so I have only set out the salient points. I acknowledge there were other exchanges of information between all the parties.

In 1978 Mr F took up employment with the Council and became an active member of the Scheme. He left employment in 2010.

Mr F says the purpose of leaving his post in 2010, at the age of 47, was in order to take full-time care of his severely disabled niece. When he left employment, his 1 CAS-44381-K1J8 accrued pension benefits were deferred for payment at his normal retirement date (NRD).

On 20 November 2018, having reached the age of 55, Mr F emailed the Council to ask it to consider his application for unreduced early retirement on compassionate grounds. Mr F provided details of his full-time permanent caring responsibility.

On 13 March 2019, the Council responded as follows:-

• It had to consider Mr F’s request in light of the Discretions Policy, set out as follows:-

o “Discretion policies in relation to scheme members (excluding councillor members) who ceased active membership on or after 1 April 2008 and before 1 April 2014:-

Description of the Legislation reference The Council’s response discretionary area and approach to this area of discretion

Whether to waive, on B30(5), TPSch2, para The Council will not compassionate grounds, 2(1) normally exercise this the actuarial reduction discretion except where applied to deferred there is a clear financial benefits paid early under or operational advantage B30 (member) to the Council.

• It had considered the details Mr F had provided regarding his financial position and caring responsibilities.

• It acknowledged Mr F was the main carer for his niece and that this commitment was of long standing. It also noted he had been in a similar position since he left employment in 2010.

• It noted that there had been no recent changes to, nor deterioration in, Mr F’s niece’s condition which would indicate a change in Mr F’s current circumstances from that which had been in place since 2010.

• The documentation Mr F had provided showed that his niece had a support package in place, including day care, evening care, and respite for Mr F, as well as a financial package to support Mr F and his family.

• The capital costs of waiving actuarial reductions as a direct result of Mr F receiving his pension benefits early were considered to be significant, which was also taken into account.

• The Council declined Mr F’s request for unreduced early retirement on the basis that waiving the reduction penalties would not have an impact or bearing on Mr 2 CAS-44381-K1J8 F’s long-established caring responsibilities. Further, the cost to the Council of waiving these penalties could not be justified.

• However, Mr F could access his pension from age 55, subject to early retirement reductions.

On 26 March 2019, Mr F appealed the Council’s decision, saying:-

• The information the Council had used in reaching its decision “bore very little relation to reality”.

• The longstanding care package was “a nightmare”, which did not cover his niece’s day and evening activities nor taxi costs. All of this had to be paid for.

• Although respite care was available, they could find no carers willing to look after somebody with his niece’s care needs within the Local Authority funding pay structure, so the family were unable to take a holiday together.

• Since his niece had transitioned from Child to Adult Services, the allowance now paid for her fell well short of that payable when she was a child. Mr F had to fund the shortfall from his savings, which had gradually been used up and were almost depleted, as a result.

• The relevant Council departments were very familiar with his niece’s case, and the significant financial implications for Mr F of the various changes that had occurred along the way since 2010.

• He had been unable to work since leaving the Council’s service and would never be able to work again while caring for his niece.

• He sought confirmation that the Council was looking at this unique case on compassionate grounds.

• He asked for an examination of Manchester City Council’s historical involvement with this complex case and for a reconsideration of its decision.

In May 2019, the Council issued its IDRP Stage 1 response stating:-

• It noted Mr F’s contention that the Council had not taken into consideration the facts in reaching its decision to decline his request for unreduced pension benefits.

• It noted his wish to have the matter reconsidered, taking account of the compassionate grounds and historical challenges his family had faced in the past with authorities and professionals involved in his niece’s case.

• It set out the Regulations and Policies relevant to the matter:-

o LGPS (Benefits, Membership and Contributions) Regulations 2007 (as amended). 3 CAS-44381-K1J8 o LGPS (Administration) Regulations 2008 (as amended). o Manchester City Council’s Discretions Policy, specifically B30(5), TPSch2, para 2 (1) as set out in its letter to Mr F dated 13 March 2019.

• It was satisfied that the Council had considered Mr F’s original application in the light of their powers of discretion and taking account of the information he had submitted regarding his financial and personal situation.

• It did not believe the Council had acted unreasonably in rejecting Mr F’s application and did not uphold his appeal.

• It appreciated Mr F had taken on considerable responsibility with his niece’s long- term care needs, but an established package of benefits had been awarded to him and to his niece. This package had been set and deemed applicable by the relevant authorities to meet her assessed needs, such that her care was not reliant on Mr F accessing an unreduced pension, as there was already a financial arrangement in place in this regard.

• If Mr F felt the support he was receiving was inadequate, he should take this up directly with the organisations who were assessing his niece’s needs and providing that support.

• The Council’s consideration of Mr F’s compassionate circumstances did not automatically mean penalties that reduced his pension for early retirement would be waived. The Council’s Discretions Policy had to take into account both his circumstances and the benefits/costs to the Council of granting his request for unreduced pension benefits.

On 13 May 2019, Mr F appealed the Stage One IDRP decision, saying:-

• He had taken responsibility for his niece when her family circumstances were found to be precarious and she was removed from her parents.

• If he had not stepped in to look after his niece, her care would have cost the Council around £70,000 per year.

• The established package of care for his niece had nothing to do with Mr F’s request for an unreduced pension as he received none of that benefit. He only received an allowance to provide his niece with a “roof over her head” and support for her needs.

• The reasons he sought early release of his pension on compassion grounds now he had reached age 55 were :-

o He had been unable to work since taking on caring responsibilities for his niece. He remained unable to work, and would be unable to do so in future for that reason.

o His niece required round the clock care on a daily basis. 4 CAS-44381-K1J8 o The case should be reviewed, taking into consideration the historical significance of the circumstances which had impacted upon his pension.

o The Council had the discretion to consider compassionate grounds where the employee is the sole or main carer for a dependant or close family member, such as his niece.

On 26 July 2019, the Stage Two IDRP letter was issued by the Referee. The principal points of this response were:-

• A member could choose to take their pension from age 55. However, that pension must then be reduced by the amounts shown as appropriate in guidance provided by the Government Actuary to account for early payment.

• It was for the Council to make the decision regarding whether, or not, it was prepared to waive the reduction penalty for taking a pension early, at age 55. The role of the Referee was restricted to reviewing the decision reached at Stage One of the IDRP to ensure the correct procedure had been followed in the Council’s exercise of its discretion.

• The Scheme was a statutory scheme, which meant its rules were regulations made by Parliament. The relevant Regulations were:-

o Regulation B30(5) of the LGPS (Benefits, Membership and Contributions) Regulations 2007 (as amended). o Regulation 66 of the LGPS Scheme (Administration) Regulations 2008 (as amended).

• It provided copies of these Regulations to Mr F.

• Having made its decision not to uphold Mr F’s appeal, he should understand that it would only be reconsidered in a very exceptional case where there had been manifest error, which was not the case here.

• The Council’s decision had been made in clear exercise of its discretion. This decision was consistent with the Council’s published policy on such requests for early release of pension on compassionate grounds.

• The Council had not made an unreasonable decision, nor one that would not be made by another decision maker.

• Accordingly, Mr F’s appeal was rejected.

Mr F’s position:-

• The Council had used the wrong criteria to assess his case.

• It had also refused to take into account the complex issues of his unique circumstances.

5 CAS-44381-K1J8 • The Council stated under Regulation B30(5) TPSch2, paragraph 2(1) that it “will not normally exercise discretion to pay him unreduced benefits except where there is a clear financial or operational advantage to the Council”. However, he had saved the Council thousands of pounds in “taking on board” a “special needs” child with learning difficulties. His position was not filled when he resigned from the Council’s service, so he has also saved the Council in salary and pension contributions since that time. Accordingly, he has demonstrated:-

o Exceptional circumstances as set out in Regulation 2.4.4 (Exercise of Discretion) “and any exceptional circumstances that may exist”. o Compassionate grounds. o Financial savings to the Council.

• He had been unable to take up gainful employment since leaving the Council’s employment due to his commitments to caring for his niece. He needed his pension income to help with his living expenses.

Adjudicator’s Opinion

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Mr F did not accept the Adjudicator’s Opinion and the complaint was passed to me to determine. Mr F provided his further comments, which do not change the outcome. I agree with the Adjudicator’s Opinion and note the additional points raised by Mr F, which are summarised below:-

• Mr F quoted Appendix 2, Regulation B30, point 4 of the IDRP Stage Two letter dated 26 July 2019. Mr F argued that the Government Actuary’s rates of reduction were only for “guidance purposes”.

• He considered the Referee’s conclusion that “The Council had not made an unreasonable decision, nor one that would not be made by another decision maker” to be “rather influencing”.

• He believed Regulation B30(5) of the LGPS (Benefits, Membership and Contributions) Regulations 2007 (as amended), and Regulation 66 of the LGPS Scheme (Administration) Regulations 2008, as amended, supported his complaint as these stated for non-active members in 2014:-

o “(9) Any pensionable pay received or contribution made by a member on or after 1st April 2014 which relates to work carried out before that date shall be dealt with in accordance with the 2008 Scheme.”

• No-one seemed willing to accept the evidence he had provided regarding the “clear financial savings and operational advantages” to be had from paying him 7 CAS-44381-K1J8 his pension early and unreduced. Yet he had saved the Council thousands of pounds by taking in a “special needs child” with learning difficulties. The Council had not replaced him when he left its service in 2010, thus saving further costs in salary, pension contributions and other costs of his employment.

• He felt that the allowances received by his niece did not “come anywhere near” cancelling out any funds the Council would need to pay if she were still being cared for by the local authority rather than living under his roof, and benefitting from the care and accommodation he provided to her.

• He had been unable to work since leaving the Council’s service because of his commitment to caring for his niece.

• All of the evidence constituted exceptional circumstances, that merited being granted an unreduced early pension.

Ombudsman’s decision

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Mr F also believes the Regulation quoted under B30(5)(9) regarding pensionable pay and pension contributions, as quoted in paragraph 17 above, supports his complaint that the matter should be dealt with under the 2008 Scheme. However, the subject of this Regulation is pensionable pay received by a member, or a member contribution made on or after 1 April 2014. Accordingly, it does not apply to Mr F, who left the Scheme when he resigned in 2010. He has, therefore, received no pensionable pay nor made any member contributions to the Scheme since that date.

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• LGPS (Benefits, Membership and Contributions) Regulations 2007 (as amended).

10 CAS-44381-K1J8 • Regulation 66 of the LGPS Scheme (Administration) Regulations 2008 (as amended).

• Manchester City Council’s Discretions Policy, specifically B30(5) TPSch2 para 2.

I do not uphold Mr F’s complaint.

Anthony Arter

Pensions Ombudsman 18 March 2022

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