IDRP

First Instance Decisions – General
Under the LGPS regulations, Scheme employers and the administering authority for the Fund have different decisions to make that could affect members’ or dependants’ pension rights or benefits (“First Instance Decisions”).

Administering authority First Instance Decisions
Any question concerning the person’s previous service or employment;
Any question about crediting additional pension; or
The amount of any benefit, or return of contributions, the member becomes entitled to under the regulations
Scheme Employer’s First Instance Decisions
Eligibility for membership;
Pensionable pay;
Final pay;
Employee’s contribution rate;
Entitlement to benefit on termination of membership;
Entitlement to early release of pension benefits, AND
Everything else ‐ Regulation 72(4)‐ “A person's Scheme employer must decide any question concerning any other matter relating to the person's rights or liabilities under the Scheme.”
Statement of policy on the exercise of discretions (Regulation 60)
Scheme employers and Administering Authorities when making first instance decisions are exercising various discretions within the LGPS regulations. The LGPS regulations require that Scheme employers must prepare and publish a statement of policy in respect of how they exercise some (though not all) of these discretions; not to do so is a breach of the Scheme employer’s statutory obligation.

Apart from being a statutory requirement to have a bare minimum published statement, it is good practice to have a comprehensive and regularly revisited statement in place, as being able to demonstrate a clear and consistent approach when making first instance decisions is one of the first steps to avoiding challenges to those decisions and a vital part of defending a position when the matter is escalated. These are covered more in “Avoiding appeals” and “The importance of good record keeping” below.

First instance decisions (Regulation 72)
Most first instance decisions are made entirely within the employing organisation, without the requirement for any external involvement.

For non ill health decisions where an active or deferred member requests the early release of his pension benefits. The employer must consider the request in accordance with its published discretions policy and the relevant pension regulations.

It should ensure that where requests are made on compassionate grounds - to collate as much information from the member to enable an informed decision to be made. Simply citing cost is not a valid reason to turn down a request.

However, for Ill health decisions the regulations require external input for an Independent Registered Medical Practitioner but it is still the Scheme employer who is responsible to make the first instance decision

First instance decisions: Ill health (Regulation 36)
A significant number of disputes are regarding entitlement to ill health benefits; when members are turned down for ill health retirement or early payment of a deferred benefit:

Ill Health Retirement (or early release of deferred benefits on ill health grounds) is a Scheme employer decision, not the decision of the medical practitioner
Employer must obtain an opinion from an approved, qualified medical practitioner that has been registered with the Administering Authority, on members’ eligibility.
For ill health retirement a member must be assessed as “permanently incapable” of discharging efficiently the duties of their current employment, and must be incapable of immediately undertaking any “gainful employment” which is defined as paid employment for not less than 30 hours in each week for a period of not less than 12 months. Member must also have become permanently incapable and be unlikely to be capable of undertaking gainful employment until normal pension age (or for three years if sooner).
For early payment of deferred payments the criteria is dependent on when the member ceased their employment. Specimen medical certificates are available which set out the relevant criteria in accordance with the relevant Regulations.
Permanently incapable means on the balance of probability the member will more likely than not be incapable of performing the duties of their current employment until their NPA.
DCLG have published statutory guidance for both Scheme employers and Medical Practitioners to assist them with the ill health retirement process. This can be accessed
here
(pdf).
When an employer is considering whether a member should be retired due to ill health it must ensure that a thorough investigation is carried out of the member's medical conditions and establish if any treatment to date or planned treatment on balance of probabilities will improve the member's condition to enable him/her to carry out the duties of their post before the age of 65/Normal Pension Age.

Information obtained from the member’s GP/specialists should include the following:

Outline of the history and nature of symptoms;
Outcome of relevant investigations;
Final diagnosis;
Treatments to date;
Current and intended treatment and likelihood of these treatments been successful;
Any relevant previous medical history;
Copies of specialist reports;
Comment from GP/specialist if in their view the member is able to carry out their post and/or engage in gainful employment.
Notification of first instance decisions (Regulation 73)
Providing a clear written explanation of the decision is an obvious and essential part of good administration. Scheme employers should bear in mind, particularly when the decision results from the exercise of discretion, that there could be a possibility of a maladministration ruling by the Pensions Ombudsman, therefore:

The grounds for the decision must be included in any notification that the person is not entitled to a benefit;
A notification about a decision on the amount of a benefits must show how the benefit is calculated;
ALL notifications must give an address from which further information about the decision can be obtained; and
All notifications must include a reference to the right of appeal, time limits within which those rights may be exercised and the job title and address of the person appointed to whom applications may be made.

Avoiding appeals
Where a member is clearly unhappy with a decision and may resort to the formal IDRP in the absence of any further action by the body that took the decision, it makes sense for an appropriate person from the Scheme employer to offer the member further information on the reasons for the decision, perhaps at an informal meeting with his advisers, if necessary. In some instances where the issues are not complex, this recognition of their concerns, and the opportunity to understand more about the decision, may be sufficient to satisfy the complainant.

Being able to demonstrate that a first instance decision has been made in a consistent manner to other decisions in accordance with a clear policy statement can also help the complainant to understand why the decision has been reached and that it is “nothing personal”. Carefully recording your decision making (see below) also makes this process much easier.

The next step
Sometimes, informal attempts to resolve disagreements fail. The member has a statutory right to then instigate the formal IDRP which is covered below. Once this course of action is embarked upon, detailed investigations will take place into not only the decision made but the processes involved in reaching that decision.

The importance of good record keeping
These investigations at the formal appeal process will require evidence of how and why a first instance decision was reached. It is important that Scheme employers keep detailed records of first instance decisions taken, including (but not limited to):

Dates of scheme entry;
Reductions/restrictions in pay;
Elections to opt out of the scheme;
Elections to re‐enter scheme;
Changes in hours and or weeks;
Breaks in service and elections to pay or not to pay contributions;
Policy on exercise of discretions, including previous versions and dates of publication;
Publicity materials, publications and other notifications issued to members and the dates of issue;
Minutes of meetings to determine eligibility for benefits; and
Committee reports or minutes on release of benefits or retirement decisions

General right of appeal
The right to invoke the formal appeal process is open not only to members themselves:

Who may appeal?
A member or a prospective member
A widow or widower of the member
A surviving civil partner of the deceased
A cohabiting partner
The deceased member’s dependants
The member’s representative
Please note that throughout this document, whomsoever invokes the IDRP is referred to as the “applicant”.

When and why can the applicant appeal?
A member (or alternative applicant) may appeal against any decision made by an Administering Authority or Scheme employer that affects that member’s rights or benefits under the scheme, or against any other act or omission by these bodies.
The member must appeal within six months of the date they are notified of that decision, or from the date of the act or omission – the adjudicator has discretion to extend this time limit
An appeal will not be able to considered if proceedings in respect of it have been commenced in any court or tribunal.
The member has a further right of appeal to the administering authority if dissatisfied with the adjudicator’s decision
The formal internal appeal process is in two stages; Stage 1 is looked at by a person who the first instance decision maker has appointed to look at these cases, Stage 2 is looked at by the Administering Authority.

Internal Dispute Resolution Procedure (IDRP)
Stage 1 appeals
Stage 1 appeals (Regulations 74 & 75)
Lodging an appeal
Where an applicant wishes to appeal against a first instance decision (or lodge another valid appeal against an act or omission), this should be done in writing, with a copy of the decision they wish to appeal against. A guide and application form for any member wishing to make an application can be obtained from the'Member booklet section'

WYPF will forward appeals to the “adjudicator” of the body that made the decision.

The adjudicator
Each employing authority must appoint a person to consider appeal cases at Stage 1 of the IDRP (their adjudicator). The Pensions Act 1995 does not stipulate any particular requirements about who should determine complaints at the first stage. The LGPS regulations, similarly, do not elaborate on who the adjudicator should or might be.

In practice, as the person will need to understand the details of the dispute, the employer is likely to ask someone with relevant expertise to decide it, although this does not have to be an employee or elected member of the authority. Depending on the circumstances, a suitable person could be a human resources manager, payroll manager or a solicitor.

Considering Stage 1 appeals
The purpose of the first stage is to carry out a formal review of the initial decision by the authority or body which took that decision. It is an opportunity to reconsider the question and, where appropriate, to alter the decision if it was not a reasonable one to reach based on the relevant procedures, legislation and evidence; e.g. where certain relevant facts or evidence were not taken into account, or where there has clearly been a mistake or oversight. The adjudicator will need to:

Check that the application has been submitted within 6 months of the relevant date and send an acknowledgement.
Consider all facts, reports, background information before reaching a determination
Request further evidence if necessary
Issue a copy of the determination to the applicant / representative, the Scheme employer and the Administering Authority
Provide a determination within two months of receipt of the appeal
If not, must write immediately to the applicant explaining the reason and when a determination will be made.
Please note, the applicant may refer the dispute direct to the Administering Authority where the Adjudicator fails to make a determination within the prescribed or extended time limits

Although in most cases the Stage 1 decision will be a final one, there may be circumstances where the adjudicator may wish to issue a provisional decision so that the views on interested parties, in particular, that of the Administering Authority, can be obtained before a final decision is taken. Because the two month time limit relates to the final decision, a letter of explanation should be sent if the issue of a provisional letter delays the final decision beyond the time limit.

Further points on appeals
The adjudicator cannot make a determination outside the provisions of the regulations
The adjudicator cannot consider cases of alleged maladministration
The adjudicator cannot make an award of compensation
A right of appeal against a decision on entitlement to a benefit only arises after the earlier of – the date employment ends, or the date specified in a notice to opt out
A successful appeal only applies to that particular case
Unless the applicant refers the decision of the adjudicator to the administering authority for determination under regulation 76, the decision reached by the adjudicator is final and binding on the scheme employer
Considerations of medical appeals
If a dispute over ill health has emerged, it would be sensible for an employer to first check that all the regulatory requirements have been complied with. If they have not, a fresh decision needs to be made.
Has a qualified, approved doctor been used to assess the member’s eligibility?
Has the doctor clearly stated that the member is not assessed as permanently incapable?
Has the medical practitioner paid due consideration to the duties of the post?
Has the doctor considered reports from the member’s GP, consultants etc in giving their opinion?
Has the doctor given an opinion and completed a medical certificate in accordance with the LGPS regulations?
Has the employer made their decision having considered all relevant evidence?
Has the employer asked all of the necessary questions to have satisfied themselves before reaching any decision?
It is not the role of the adjudicator to question the opinion of a suitably qualified, approved medical practitioner. But the assessment must be in accordance with the eligibility criteria in the regulations
Other potential appeal applications
Tiered contributions
Pensionable pay ‐ e.g. exclusion of certain items
Final pay for calculation purposes
Date of scheme entry – especially at the end of a member’s service
Claim of not being informed of right to pay back for lost pension
Claim of not being informed of right to transfer in previous rights or aggregate earlier LGPS membership within 12 months of joining
Exercise of discretionary powers
Due to the scope of the Pensions Act 1995, the adjudicator may be asked to consider a disagreement about the way in which a Scheme employer has exercised a discretionary power under both the main scheme regulations and the Local Government (Early Termination of Employment) (Discretionary Compensation) (England and Wales) Regulations 2006. In such cases, the role of the person deciding the disagreement is not to overturn the initial decision but to ensure that the discretion has been exercised reasonably, and in cases where this is found not to be the case, to determine that the matter should be reconsidered in a proper manner.

Notice of a stage 1 decision
Written notice of the adjudicator’s decision must be sent to the applicant (and/or his/her personal representative), the Scheme employer, and the Administering Authority, within two months of the receipt of the appeal.

The decision notice must include the following:
The question for determination
Evidence received and considered
The decision
A reference to any legislation or Scheme provisions that it relies on
Where relevant, a reference to the Scheme provisions conferring the discretion whose exercise has caused the disagreement
A reference to the applicant’s right to have the disagreement reconsidered by the Administering Authority, and the time limit for doing this
A statement that TPAS is available to assist the member with any difficulty with the Scheme which remains unresolved, and the address for TPAS
IDRP Stage 1 process summary
Member notified of decision / benefit
Member submits appeal, in writing within six month time limit
Appeal considered by adjudicator within two months
Member, Scheme employer AND Administering Authority notified of outcome
Member has the right of appeal to The Administering Authority (within six months of the adjudicator’s determination)

Internal Dispute Resolution Procedure (IDRP)
Stage 2 appeals
Stage 2 appeals – referral of disagreement to Administering Authority (Regulation 76)
Referrals to the Administering Authority against the decision of the adjudicator may be made by the applicant. A disagreement may also be referred in cases where:

The adjudicator has failed to issue either a decision, or a letter of explanation, within two months from the date on which the application was made, or
An interim letter of explanation was sent, but the adjudicator has failed to subsequently issue a decision.
Considering Stage 2 appeals
The person determining appeals at Stage 2 will, in many respects, undertake that function in the same way that the adjudicator did under Stage 1.

The applicant’s complaint must be considered in depth and in a formal way; the Administering Authority need to satisfy themselves that the first stage decision was reasonable, had considered all relevant facts and regulations , was consistent with other decisions reached and that it would stand up to external scrutiny.

The Administering Authority should:
Reconsider the decision, taking full account of the facts of the case and any evidence submitted, or relied on, by either party in the determination at Stage 1,
Check that the regulations were applied correctly,
Check that sound, impartial procedures were used to reach the decision. This is particularly important where the dispute concerns the exercise of a discretion by a Scheme employer or by the Administering Authority.
Limit of administering authority powers at Stage 2
Cannot replace an employer first instance decision, can only instruct to reconsider where discretion is exercised
No awards for maladministration even where found
No power to act outside of the regulations nor to instruct any party to do so
No power to award compensation for any reason, including where an appeal is upheld against the amount of a benefit due; limited to placing the affected party in the position they would have been in.
Impartiality
By definition, an internal resolution procedure must be carried out by those responsible for the scheme; an entirely independent judgement is available via the Ombudsman.

However, the decision must be fair‐minded and impartial having regard to the following principles:

Not representing any party or interest
No previous personal involvement with the case
In practice, even where the appeal is against a decision that has been taken by the Administering Authority, there will always be sufficient senior officers that have not had any personal interest and who can give an impartial decision without deference to the position of the Administering Authority at an earlier stage.

Notice of a Stage 2 decision
The Administering Authority must respond to a Stage 2 appeal within the same time limits that apply to Stage 1 appeals, i.e. within two months of the receipt of the appeal. A notice of the decision must be in writing and contain:

The question for determination
Evidence received and considered
The decision
A reference to any legislation or Scheme provisions that it relies on
Where relevant, a reference to the Scheme provisions conferring the discretion whose exercise has caused the disagreement
A statement that TPAS is available to assist the member with any difficulty with the Scheme which remains unresolved, and the address for TPAS
A statement that the Pensions Ombudsman may investigate and determine any complaint or dispute of fact or law and the Pensions Ombudsman’s address.
Possible outcomes
Appeal not upheld:
The Stage 2 decision maker has reviewed the facts and the evidence in the case and has not found that any decision reached is either incorrect or inconsistent with the appropriate application of the regulations and any discretion applied.

Appeal upheld:
The decision maker may not be satisfied that the initial decision was properly reached or that the appropriate legislation has not been correctly applied or adhered to. The stage 2 decision maker cannot impose any alternative decision upon the original decision maker wherein a discretion was exercised – he can only remit the case for reconsideration highlighting his areas of concern or where fault was found in law or in fact. Where it is found that the decision was incorrect in the application of regulations or in calculating benefits due, he can instruct that the correct position be applied in relation to the member.

Appeal partially upheld:
Occasionally, an appeal may have more than one head of argument or may rest on more than one determining factor. Where this is the case, the administering authority may find that the appeal should be upheld in part rather than wholly and a combination of the possible outcomes above be applied.

The decision of the administering authority is binding and can only be overturned by the Ombudsman or the High Court. The administering authority will not enter into further correspondence in relation to the appeal.

Internal Dispute Resolution Procedure (IDRP)
Rights of Representation
Rights of Representation – Stages 1 & 2
A person who is entitled to make an application under the procedure can nominate a representative to make the application on his behalf. He can use the representative to make a first stage or second stage application. He can also use the representative to continue the appeal.

If a person dies and they had a right to make an appeal, or they had made an application at either the first or second stage, their personal representative may continue the appeal on behalf of the deceased.

If a person who has a right to make an appeal is a minor, or he is otherwise incapable of acting for himself, the appeal may be made/continued on his behalf by a member of his family or some other suitable representative.

If a person who has made an appeal at either the first or second stage, is or becomes otherwise incapable of acting for himself, the appeal may be made/continued on his behalf by a member of his family or some other suitable representative.

Where a representative is nominated before an appeal is made, the appeal must specify his full name and address and whether that address is to be used for service on the applicant of any documents in connection with the appeal. If the representative’s address is not used in that way, they must nevertheless be sent a copy of any notification of a first stage or second stage decision. If an interim reply was sent at either the first or second stage, the representative must be sent a copy.

Where a member remains dissatisfied after the IDRP has been exhausted, they can seek independent review of their appeal. There are two bodies responsible for the review of appeal decisions beyond the IDRP.

The Pensions Advisory Service
The Pensions Advisory Service (TPAS) is an independent non-profit organisation that provides free information, advice and guidance on all types of pension schemes. Their role is primarily one of negotiation and advice; they have no statutory power to impose any course of action or determination.

This should be the first port of call for any member seeking an independent review of the IDRP. They will attempt to explain or resolve the problem and, where this is not possible, the steps available to the member. TPAS can also give their opinion to the member as to whether they believe this would be a case that the Pensions Ombudsman would pursue.

If resolution can still not be found, the member (or alternative applicant) has one further point of recourse.

The Pensions Ombudsman
Will only normally consider cases after the member’s case has been through the scheme’s two stage IDRP and where TPAS have been approached
May investigate and determine any complaint or dispute of fact or law in relation to the Scheme made or referred in accordance with the Pension Schemes Act 1993
The Ombudsman can make awards of compensation for loss and for distress and inconvenience
The determination of the Ombudsman is final and binding on all parties, subject only to an appeal on a point of law to the Chancery Division of the High Court
Cases sent to the Ombudsman’s office are initially assessed by his staff to determine whether the appeal or dispute can, or should, be referred for consideration by the Ombudsman. Further information may be sought at this stage from both the administering authority and the Scheme employer, as well as from the individual.

Where the Ombudsman does make a determination in respect of a case that he feels can and should be before him, the possible outcomes are the same as set out at Stage 2 of the IDRP (above).

The appeal may be wholly, or partially, upheld or he may determine that the appeal should not be upheld against the respondents at all. When making his determination, the Ombudsman will have regard to former cases, but these are not precedent, as at law. Consequently, parties to an Ombudsman investigation should concentrate on the facts and law applicable in their circumstances rather than rely upon the outcome of previous cases that were prima facie the same. A history of former determinations is available on the Pensions Ombudsman’s website:www.pensions-ombudsman.org.uk/our-decisions/

The Ombudsman’s determination can only be challenged on a point of law. The appeal against the decision of the Ombudsman needs to be made to the High Court within 28 days of the date of the decision that is being appealed against.

And, finally…
Determining appeals is anything but straightforward
WYPF is available to assist employers with this task and will provide information on the process and regulations that may be involved.
WYPF cannot draft responses, advise upon decisions or become otherwise directly involved with an employer/adjudicator function.
It is important that employers keep comprehensive records in the event of an appeal from members
Members must not be discouraged from submitting an appeal.