Principal Civil Service Pension Scheme · CAS-57631-L2T8

CAS-57631-L2T8

Ombudsman’s Determination Applicant Mr N

Scheme Principal Civil Service Pension Scheme (PCSPS)

Respondents Civil Service Pensions (MyCSP)

Cabinet Office

Outcome

Complaint summary

1 CAS-57631-L2T8 Background information, including submissions from the parties

1 This reflects the position prior to McCloud v Lord Chancellor [2017] 029 PBLR (035).

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• He had been advised that he would receive ill health retirement benefits under the Classic Section of the PCSPS.

• He wanted a refund of his WPS contributions.

• He had requested EPPA in respect of his Classic Section benefits.

• He wanted a payment for interest in respect of the late payment of his benefits.

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(i) Employers were responsible for providing it with accurate and up-to-date data.

(ii) Prior to it taking on administration of the PCSPS in 2012, Mr N’s pension had been administered by an Authorised Pension Administration Centre (APAC). It had inherited member records from the APAC.

(iii) When Mr N re-joined service, in 2004, he was enrolled in the Premium Section because the Classic Section was closed to the majority of re-joiners from October 2002. He transitioned to the Alpha Scheme in April 2015.

(iv) In the Premium Section, eligible members had been able to aggregate periods of service in their first 12 months of new service. It had not been the administrator at the time Mr N joined the Premium Section and it had been unable to find any documentation or other evidence that he had asked to aggregate his two periods of service. It acknowledged that this did not mean that Mr N had not tried to do so. It said it could not comment further for the purposes of its IDRP decision.

(v) Mr N had queried his service history in 2017. It had been identified that his Classic Section service had not been preserved at the time he had left in 2002. This element of Mr N’s complaint was upheld against the APAC.

(vi) It had been unable to identify a record of Mr N being advised that he was a member of the Classic Section in May, June or July 2017. It was, therefore, unable to comment on this aspect of his complaint.

(vii) It had not received a request for an ill health retirement quotation from Mr N’s employer until 20 December 2018. Mr N’s employer had confirmed that he had been referred to occupational health in November 2017 and the ill health retirement process had been initiated in May 2018. Mr N’s employer had received a lower tier medical retirement certificate from the SMA on 17 December 2018.

(viii) It had asked Mr N’s employer for a severe ill health certificate before processing his quotation. This had not been required and had delayed Mr N’s

4 CAS-57631-L2T8 ill health retirement award. This aspect of Mr N’s complaint was upheld. It apologised and offered Mr N £500 as an ex-gratia payment 2.

(ix) Mr N had advised it that he wished to access his Classic Section benefits. He had been advised that he would need to apply for EPPA. This information was correct. However, Mr N’s employer had confirmed that it had not clarified the process for him and this aspect of his complaint was upheld against the employer.

(x) Mr N had submitted an EPPA form on 6 September 2019. His former employer was responsible for referring the form to the SMA. There had been a delay in referring Mr N’s form to his employer and it apologised for this. It had instructed the employer to refer the form to the SMA immediately if it had not already done so.

(xi) Mr N had requested a refund of his WPS contributions. A WPS refund was payable under the Classic Section. It was not payable until Mr N claimed his Classic Section benefits.

(xii) Mr N had applied for both a temporary and permanent injury benefits. It had received his application on 15 June 2019 and referred it to the SMA on 1 July 2019. Mr N’s application for a permanent injury benefit could not be considered until his claim for a temporary injury benefit had been decided. The SMA had requested details of Mr N’s GP on 21 August 2019. The SMA had confirmed receipt of these details on 24 September 2019 and his application was progressing.

(xiii) It had not received a completed personal details form allowing it to make payment of Mr N’s ill health retirement benefits. It would make payment on receipt of this paperwork and backdate the benefits to his last day of service.

Mr N completed another injury benefit application form on 2 December 2019.

Mr N submitted a stage two IDRP complaint on 11 February 2020. The second stage of the IDRP is undertaken by Cabinet Office. It issued a decision on 28 August 2020. Cabinet Office said:-

(i) When considering an IDRP appeal, it aimed to put the individual in the position they would have been in if the administration of their pension had been done correctly at the relevant time. The PCSPS Rules were statutory and could only be varied where there was discretion to do so. An individual could not be left any better or worse off than they would have been if treated correctly at the relevant time.

2 Payment was made on 20 December 2019.

5 CAS-57631-L2T8 (ii) When Mr N left the Prison Service in 2002, he should have been awarded preserved benefits. This did not happen and his pension record remained open. This would have shown him as a member of the Classic Section.

(iii) When Mr N rejoined in 2004, he had been correctly enrolled in the Premium Section. He had said that he enquired about aggregating his two periods of service and provided copies of payslips showing contributions to both the Classic and Premium Sections to evidence this. This had been due to his Classic Section record remaining open. There was no evidence to indicate that Mr N had made enquiries about aggregation prior to 2019. This aspect of his complaint was not upheld.

(iv) If Mr N had opted to aggregate his service in 2004, all of his service would have been treated as in the Premium Section, subject to Rule G4(4) (see Appendix).

(v) MyCSP had confirmed that no benefits had yet been paid to Mr N. It was waiting for confirmation of service and pay from the Prison Service before it could finalise his injury benefit award. It was waiting for Mr N to return paperwork for it to process his ill health retirement. His WPS refund would be payable when his Classic Section benefits were brought into payment.

(vi) MyCSP had acknowledged its part in the delay in issuing Mr N’s ill health retirement quotation and had offered him £500. This was an appropriate payment and in line with guidance issued by the Pensions Ombudsman.

(vii) Mr N had requested quotations based upon membership of the Classic and Premium Sections and the Alpha Scheme. He was only entitled to a quotation based upon the appropriate rules and regulations. The appropriate regulation in his case was Regulation 182 and Schedule 2, Part 5 (see Appendix). This applied to the payment of ill health retirement benefits to transition members with continuity of service (Premium and Alpha). Mr N could apply separately for EPPA on the grounds of ill health in respect of his Classic Section benefits.

Mr N’s position

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Cabinet Office’s position

8 CAS-57631-L2T8 Adjudicator’s Opinion

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The SMA notified MyCSP, on 10 September 2019, that it had closed Mr N’s case because it had not received details of his GP. MyCSP had said that it then wrote to Mr N, on 20 September 2019, asking him to complete the relevant section of the injury benefit application form providing his GP’s details. Mr N completed another injury benefit application form on 2 December 2019.

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Neither Mr N nor MyCSP accepted the Adjudicator’s Opinion and the complaint was passed to me to consider. Mr N and MyCSP have provided their respective comments which do not change the outcome. I agree with the Adjudicator’s Opinion and note the additional points raised by Mr N and MyCSP.

• His deferred Classic Section benefits should be calculated by reference to his final salary, not his salary in 2002.

• As his pay and service were relinked his injury benefit should be a guaranteed minimum income of 60% based on over 15 years reckonable service.

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MyCSP’s further comments

Ombudsman’s decision

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Mr N says his injury benefit should be a guaranteed minimum income of 60% based on over 15 years reckonable service.

Again, this is outside the scope of complaint that was accepted for investigation. Mr N should raise his concern about the calculation of his injury benefit with MyCSP in the first instance.

I partially uphold Mr N’s complaint.

15 CAS-57631-L2T8 Directions Within 28 days of the date of this Determination, MyCSP shall pay Mr N a further £500 for the serious distress and inconvenience he sustained as a result of its uncoordinated approach to administering his claims.

Anthony Arter

Pensions Ombudsman 25 November 2022

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17 CAS-57631-L2T8 Appendix The PCSPS Rules

The 1972 Section

“Except where otherwise stated, this scheme applies to staff whose service ends on or after 1 June 1972 and before 1 October 2002 or who are in service on 30th September 2002.”

“Except in relation to persons or classes of persons determined by the Minister, or where rule 1.3b, 1.3c, 1.3e or 1.3f applies, the 1972 Section is closed to persons serving in the civil service whose service begins, or whose service after re-employment begins, after 30 September 2002.”

“A civil servant who resigns … and who … has two or more years’ qualifying service … and who does not opt to transfer the whole or … part of his accrued pension benefits out of this scheme, will be awarded a preserved pension and lump sum in respect of such part of his accrued pension benefits as is not transferred. … these will be brought into payment when the civil servant reaches the pension age, and will be calculated in the way described in rule 3.1.”

18 CAS-57631-L2T8 The 2002 Section

“(1) A person is eligible to be an active member of this Section of the Scheme if the conditions A to C are met, or condition D is met, and he is not prevented by rule B.2 (persons with other pension arrangements) or B.3 (eligibility where pension or lump sum previously received).

This is subject to rule B.1B 3.

(2) Condition A is that the person -

(a) is in permanent employment in the Civil Service,

(b) holds a permanent employment or office that is listed for the time being in Schedule 1 to the Superannuation Act 1972, or

(c) holds an appointment in the Civil Service for a fixed term or an employment or office that is so listed for a fixed term.

(3) Persons engaged on a fee-paid basis and unestablished staff engaged locally overseas are not regarded as meeting condition A.

(4) Condition B is that the terms on which the person holds the employment do not exclude him from belonging to the Scheme.

(5) Condition C is that -

(a) the person's employment begins on or after 1st October 2002 and before 30th July 2007 and the person is not someone who became an active member of the 1972 Section in respect of that employment and subsequently opted out of the 1972 Section,

(b) the person has opted to join this Section of the Scheme under Part K or L (persons who have been members of the 1972 Section),

(c) the person’s employment begins on or after 30th July 2007 and one of paragraphs (2) to (5) of rule B.1A applies to that person, or

(d) the Minister determines that condition C is met for the person or for a class of persons to which the person belongs.

(6) Condition D is that the person –

(a) is in service in an employment or office specified in a list produced for the purposes of section 1(4A) of the Superannuation Act 1972; and

(b) fulfils the conditions for eligibility specified in J1.1.”

3 Employment on and after 1st April 2015

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“(1) Subject to paragraph (6), this rule applies in the case of a re-employed active member to whom rule G.3 does not apply who was awarded a preserved pension and lump sum under rule 3.11 of the 1972 Section.

(2) The member may opt for the qualifying and reckonable service in respect of which the member was awarded the preserved pension -

(a) to be aggregated with the reckonable service and qualifying service that he is entitled to count as a result of his membership of this Section in the current employment for the purpose of determining rights under this Section in respect of that membership, and

(b) to be disregarded for all other purposes.

This is subject to paragraphs (3) to (6).

(3) If the member is entitled to more than one preserved pension under rule 3.11 of the 1972 Section, the member may only exercise the option under paragraph (2) in relation to the service to which the later (or, if there are more than two, the latest) of the awards relates.

(4) Where a person exercises the option under paragraph (2), the reckonable service and qualifying service he may count as a result of the exercise of the option is to be calculated in accordance with guidance and tables provided for the purpose by the Scheme Actuary.

(5) If -

(a) the award under the 1972 Section of a member who exercises an option under this rule is subject to a pension debit, and

(b) in the opinion of the Scheme administrator it is necessary for the purpose of giving effect to the pension debit for some or all of the benefits to which the pension member is entitled under this Section of the Scheme as a result of exercising the option to be taken in a different form from that in which he would otherwise be entitled to take them, the Scheme administrator may, after taking advice from the Scheme actuary, make such modifications to the member's rights as to the form of those benefits as he considers necessary for that purpose.

(6) A person to whom rule B.3(4) applies (eligibility where pension or lump sum previously received) may not exercise the option in paragraph (2) in respect of the previous employment referred to in that rule.”

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“(1) An option under rule G.3(2) or G.4(2) may only be exercised before the end of -

(a) the period of 12 months beginning with the day on which the current employment begins, or

(b) such longer period, if any, as the Minister or, if the Minister so directs, the Scheme administrator considers appropriate.”

The Public Service (Civil Servants and Others) Pensions Regulations 2014 (SI2014/1964) (as amended)

“(1) This paragraph applies in relation to a transition member with continuity of service who –

(a) becomes entitled to an ill-health pension under this scheme; and

(b) has not reached normal pension age under the PCSPS.

(2) If this paragraph applies –

(a) an ill-health pension and lump sum are not payable under the PCSPS;

(b) an ill-health pension is payable under this scheme in accordance with this paragraph; and

(c) the member becomes a deferred member of the PCSPS …”

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