Agenda item

To be presented by Sam Price, Assistant Pensions Administration Manager, Buckinghamshire Council.

S Price Assistant Pensions Administration Manager, Buckinghamshire Council, provided an update on the formal internal dispute resolution procedure cases for 2021/22.

The following points were highlighted:

·    There were five internal dispute resolutions procedure cases (IDRP) for the year 2021/22. This figure was down from seven cases the previous year. In previous years, IDRP cases mainly related to ill health retirements however, there were none of these type of cases recorded this year.

·    The report listed the five appeals and the decisions which were upheld against the Council. Cases four and five were a result of human error in the administration team. Case five was partially upheld and related to an error in the calculation of benefits. The team reviewed these errors and put further training in place.

·    Cases one and three related to transfers out of LGPS pension rights. There was a rising trend in the number of transfer appeals due to the rise in claims management companies acting on behalf of scheme members. The management companies identify scheme members who have transferred their pension rights to check if there was any financial loss incurred and if the administration authority was at fault. The Council’s legal team investigated the two cases at stage 2, one appeal was declined as no fault was found with the administrative authority’s transfer process. The appeal for the second case was partially upheld as there was no evidence a Scorpion transfer leaflet had been sent to the scheme member during the transfer process. In this case compensation was awarded to the members for the distress and inconvenience caused. However, the absence of this leaflet was considered as unlikely to have affected the member’s decision to transfer out.

·    It was noted there were cases of members fraudulently transferring out of the scheme to an occupational scheme for companies they were not employed by. The pensions scams guidance and more stringent checks on transfers would reduce the number of these cases.

A member of the Board queried if there would be a significant increase in the number of appeals from claims management companies. The officer advised they would raise this with other LGPS funds to gauge how many cases are being raised. These cases can end up with the Pensions Ombudsman which requires a thorough investigation by the administrative authority.

A member of the Board asked if the Council would require insurance if the number of compensation claims was likely to increase. It was advised compensation would only be due if there was evidence the administrative authority did not follow the correct process. There were instances where scheme members had fraudulently provided documentation to initiative a transfer. There were procedures in place to check contracts of employment and employer details. The number of these cases being upheld on appeal were expected to be few.

It was queried if any legal action could be initiated against scheme members who committed fraud when transferring their pension rights. It was advised the claims management companies were acting within the law when investigating these claims. It was noted if scheme members transfers were complete and it was found the fund did not follow the correct process and due diligence, they would likely be reinstated to the scheme instead of receiving financial compensation.

There had been four cases raised in 2022/23 so far with one case related to ill health. The compensation payments were locally set between £250-£500 for stage one complaints, about £750 for Stage 2 complaints and payments were based on circumstances.

A member of the Board highlighted as these cases were time consuming to investigate and resolve was there an option to reclaim officer time. It was advised scheme members were permitted to make stage one and two appeals under scheme regulations and these would be monitored going forward. The compensation fees were based on guidance from the Pensions Ombudsman and reclaiming costs would require changes to legislation.

RESOLVED Members of the Board noted the update.