Appeals process

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Forms for employers

Use our employer forms to notify us of changes to LGPS members.

Introduction

Employers make decisions about their employees which can impact Local Government Pension Scheme (LGPS) pension benefits. These decisions can affect an employee’s pension benefits during and after their employment.

Where an LGPS member disagrees with a decision made by their employer, the law provides them with the opportunity to challenge the decision. This is supported by the following Act and set of regulations:

The Pensions Act 1995

Section 50 of the Pensions Act 1995 requires occupational pension schemes (such as the LGPS) to arrange to resolve disagreements between the trustees or managers of the scheme, and one or more people with an interest in the scheme.

The Local Government Pension Scheme Regulations 2013

The relevant sections are:

Regulation 72 ‐ First instance decisions
Regulation 73 ‐ Notification of first instance decisions
Regulation 74 ‐ Application for adjudication of disagreements
Regulation 75 ‐ Decisions of the adjudicator
Regulation 76 ‐ Reference of adjudications to administering authority
Regulation 77 ‐ Decisions of the Administering Authority on reconsideration
Regulation 78 ‐ Rights of representation
Regulation 79 ‐ Appeals by Administering Authorities
Regulation 74 is a formal procedure known as the Application for Adjudication of Disagreements Procedure (AADP). It is in place to resolve disagreements about decisions taken regarding LGPS pension matters. When disagreements happen, they form part of an overall process.

The following steps can be taken:

A decision is taken that affects benefits (a ‘first instance decision’)
An informal approach to resolving a disagreement about that decision
The instigation of the formal, internal 2-stage appeal (AADP)
Application to the Pensions Ombudsman for a determination (the external appeal)

Members must not be discouraged from submitting an appeal.

First instance decisions

Employers and administering authorities make decisions that could affect member or dependants’ pension benefits. These are called ‘First Instance Decisions’.

The following lists demonstrate the different decisions that both the employer and administering authority need to make:

Examples of employer first instance decisions

Eligibility for membership
Pensionable pay
Final pay
An employee’s contribution rate
Entitlement to benefits on termination of membership
Entitlement to early release of pension benefits
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.”

Examples of administering authority first instance decisions

Any question concerning a person’s previous service or employment
Any question about including additional periods as membership or crediting additional pension
The amount of any benefit, or return of contributions, the member becomes entitled to under the regulations

Statement of policy on the exercise of discretions

Employers and administering authorities exercise various discretions within the LGPS regulations when making first instance decisions. These regulations require that employers must prepare and publish a statement of policy stating how they exercise some (though not all) of these discretions.

You can find a template and a guide on our employer discretions page.

If an employer fails to prepare and publish a statement of policy, this is breach of their statutory obligation.

Apart from being a statutory requirement to have a published statement, it’s good practice to have a comprehensive and regularly updated statement in place.

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 a matter is escalated.

Notification of First Instance Decisions

Providing a clear, written explanation of the decision is an essential part of good administration. Without this there could be a possibility of a maladministration ruling by The Pensions Ombudsman.

When notifying a person that they’re not entitled to benefits, it must include the grounds for the decision.

A decision notification about the value of benefits must demonstrate how the benefit was worked out.

All notifications must give an address where further information about the decision can be found. All notifications must include:

a reference to the right of appeal under regulations 74 and 76 of the LGPS regulations (the right of appeal under the AADP)
the time limits within which those rights may be exercised
the job title and address of the person appointed to whom applications may be made

The informal process: Avoiding appeals

Where a member is unhappy with a decision, you should try and deal with the matter informally.

You can arrange for them to meet with the decision maker. This might help the member to understand why the decision was reached. Further details and reasons for the decision can then be discussed. It’s important to explain that the decision was made consistently and in accordance with a clear policy statement.

An acknowledgement of their concerns, and a deeper understanding of any reasons behind a decision, may satisfy the complainant.

Carefully recording your decision making also makes this process much easier.

Informal attempts to resolve disagreements can sometimes fail, however. The member has a statutory right to then instigate the formal AADP. Detailed investigations will then take place into any decisions made and the processes involved in reaching those decisions.

The formal appeal process: AADP

There are 2 stages to AADP:

Stage 1 is considered by a person who the first instance decision maker has appointed to look at these cases
Stage 2 is considered by the administering authority

Each employer must appoint a person to consider appeal cases at Stage 1 of the AADP. This person is known as an 'adjudicator'.

It isn't clear from the Pensions Act 1995 and LGPS regulations who an adjudicator should be. In practice, it is likely to be someone with relevant expertise, as the adjudicator needs to understand the details of the dispute. Depending on the circumstances, a suitable person could be:

a human resources manager
payroll manager
a solicitor

Individuals who can appeal

People who apply under AADP are known as 'applicants'. Any of the following people have the right to submit an appeal:

A member or a prospective member
A widow or widower
A surviving civil partner
A surviving cohabiting partner
Surviving eligible dependants
The member’s representative

Rights of Representation

An applicant can nominate a representative to act on their behalf. They can ask their representative to make a Stage 1 or Stage 2 application. They can also ask their representative to continue the appeal.

If a person dies who had a right to make an appeal, or they had made a Stage 1 or Stage 2 appeal before they died, their representative can continue their appeal.

If the person who has the right to appeal is unable to act for themselves, the appeal may be made or continued by a family member or another representative.

A representative must include their full name and address on an appeal application. The application should also indicate whether this person and their address should be used as the primary contact. If this isn't specified, the representative must receive a copy of any notification of a Stage 1 or Stage 2 decision. This includes any interim replies.

Timescales

The member must appeal within 6 months of the date they are notified of a decision, or from the date of the act or omission. The adjudicator can decide whether to extend this time limit.

Reasons for an appeal

The member has the right to appeal to the Fund’s administering authority if dissatisfied with their adjudicator’s decision.

The applicant may appeal against any decision made by an administering or employing authority that affects that member’s:

rights under the scheme
benefits under the scheme
any other act or omission by these bodies

The importance of record keeping

Once investigations reach the formal appeal process, evidence is required about how and why first instance decisions have been made.

It’s important that employers keep detailed records of first instance decisions. Examples of this may include:

dates of scheme entry
reductions or restrictions in pay
elections to opt out of or re-enter the scheme
breaks in service
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
meeting minutes to determine eligibility for benefits
committee reports or minutes on release of benefits or retirement decisions

A Fair and Impartial Decision

An AADP must be carried out by those responsible for the scheme. An entirely independent judgement is available through The Pensions Ombudsman.

The decision must be fair‐minded and impartial. The decision maker must not represent any party or interest and must not have had any personal involvement with the case.

Where the appeal is against a decision that has been taken by the administering authority, there will always be enough senior officers that have not had any personal interest who can make an impartial decision.

AADP: Stage 1

Where an applicant wishes to appeal, this should be done in writing using the Fund’s ‘Application for adjudication for a disagreement form’ attached to this page. A copy of the decision they wish to appeal against should also be provided. We have a feedback, complaints and appeals page our Fund members can visit.

The Stage 1 appeal is then submitted to the ‘adjudicator’. If you don't have an adjudicator, you can update your employer's contact information and signatories. AADP Stage 1's purpose is to formally review the initial decision made by the authority or body. It is an opportunity to investigate and reconsider the decision based on any:

relevant procedures
legislation
evidence

The adjudicator can also alter the decision if they find:

relevant facts or evidence were not considered
there has been a mistake
there has been oversight

These are the steps that an employer’s adjudicator should take when considering a Stage 1 appeal:

Check that the application has been submitted within 6 months of the relevant date.
Send an acknowledgement. You can find content for an example acknowledgement letter on this page.
Consider all facts, reports and background information before reaching a determination.
Request further evidence if necessary.
Provide a determination within 2 months of receiving the appeal and issue a copy to the applicant / representative, the employer and the administering authority. You can find content for an example Stage 1 decision letter on this page.
If the adjudicator cannot provide a determination within 2 months, they must contact all parties providing a reason and a revised date for determination. This is because the applicant / representative can refer the dispute directly to the administering authority.

In most cases the Stage 1 decision will be the final one. There may be circumstances however where the adjudicator wishes to issue a provisional decision. This is done to ensure the opinions of all interested parties can be obtained before a final decision is made.

As the 2-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.

Important information for adjudicators

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.

If an adjudicator upholds a Stage 1 AADP, the successful appeal only applies to that particular case.

Adjudicator's are unable to:

make determinations outside the provisions of the regulations
consider cases of alleged maladministration
award of compensation

Notice of a Stage 1 Decision

When the adjudicator writes to the parties, they must include the following information:

The question for determination
What evidence has been received and considered
The decision
References to any legislation or scheme provisions that the decision relies upon
References to the employer discretion which has caused the disagreement (where relevant)
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 The Pensions Ombudsman is available to assist with any difficulty which remains unresolved, and their contact details.

The decision reached by the adjudicator is final and binding on the scheme employer (unless the applicant refers the decision of the adjudicator to the administering authority for determination under regulation 60).

AADP: Stage 2

The applicant can refer a disagreement against the adjudicator’s decision to the administering authority. A disagreement may also be referred in cases where:

the adjudicator has failed to issue an acknowledgement letter
the adjudicator has failed to issue a decision letter (including an explanation) within 2 months from the date on which the application was made
an interim letter of explanation was sent, but the adjudicator has failed to subsequently issue a decision

The person determining a Stage 2 AADP will undertake the same process that the adjudicator did under Stage 1.

The applicant’s complaint must be formally considered.

The administering authority needs to be satisfied that the Stage 1 decision:

was reasonable
considered all relevant facts and regulations
was consistent with other decisions reached
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.

Notice of a Stage 2 decision

The administering authority must respond to a Stage 2 AADP within 2 months of receipt.

A notice of the decision must be in writing and contain:

the question for determination
the evidence received and considered
the decision
a reference to any legislation or scheme provisions that it relies on
references to the employer discretion which has caused the disagreement (where relevant)
a statement that MoneyHelper is available to assist with any pension problems nad changes which remain unresolved, and their contact details
a statement that The Pensions Ombudsman may investigate and determine any complaint or dispute of fact or law and the Pensions Ombudsman’s address.

Beyond AADP: The external appeal

Where a member remains dissatisfied after the AADP has been exhausted, they can seek independent review of their appeal. There are 2 bodies who can review appeal decisions beyond the AADP:

MoneyHelper

MoneyHelper is a free, impartial service that provides guidance on money and pensions in the UK. It's offered by the Money and Pensions Service (MaPS), which is sponsored by the Department for Work and Pensions. Their role is primarily one of negotiation and advice. They have no statutory power to impose any course of action or determination.

This is the step for any member seeking an independent review of the AADP. MoneyHelper will attempt to explain or resolve the problem and, where this is not possible, the steps available to the member. MoneyHelper can also give their opinion to the member and whether they believe this would be a case that the Ombudsman would pursue.

If a resolution can still not be found, the member (or alternative applicant) has one further option.

The Pensions Ombudsman

The Pensions Ombudsman is a non-departmental public body funded by the Department for Work and Pensions (DWP).

The Ombudsman will only normally consider cases after the member’s case has been through the scheme’s 2 stage AADP. They can investigate and determine any complaint or dispute of fact or law in relation to the scheme in accordance with the Pension Schemes Act 1993. They can also make awards of compensation for loss and for distress and inconvenience.

The decision of The Pensions 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.

Where the Ombudsman makes a determination about a case, the possible outcomes are the same as AADP Stage 2. The appeal may be:

wholly upheld
partially upheld
not upheld

When making the determination the Ombudsman will regard former cases, but these are not precedent. 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. A history of former determinations is available on the Pensions Ombudsman’s website.

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.

Considerations of medical appeals

For ill health retirement disputes, please 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 medical practitioner been used to assess the member’s eligibility?
Has the medical practitioner 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 medical practitioner considered reports (for example, from the member’s GP, consultants) in arriving at that decision?
Has the medical practitioner made a recommendation 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. The assessment must be in accordance with the eligibility criteria in the regulations.

Exercise of discretionary powers

The adjudicator may be asked to consider a disagreement about the way in which a scheme employer has exercised a discretionary power. 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. In cases where this is found not to be the case, the matter should be reconsidered in a proper manner.

Further Notes

Derbyshire Pension Fund is available to help employers with appeals and will provide information on the process and regulations that may be involved. However, we cannot draft responses, advise upon decisions or become otherwise directly involved with an employer or adjudicator function.

It is important that employers keep comprehensive records in the event of an appeal from members.

Example: AADP Stage 1 employer acknowledgement letter

Dear [Full Name],

Local Government Pension Scheme (LGPS) – Application for Adjudication of Disagreements Procedure (Stage 1)

Thank you for your application received on [Day Month Year], enclosing information on your disagreement with [Name of relevant body].

I have been appointed by [Name of relevant body] to make the Stage 1 decision under the Application for Adjudication of Disagreements Procedure.

I am required to make a decision within 2 months of receiving your application. If for some reason I am unable to comply with that timescale, I will write to you explaining the reason and the date by which I expect to make my final determination.

Further help

You can request additional help and support from the following 2 independent organisations:

MoneyHelper can help members and beneficiaries with any questions or guidance about their pension benefits. You can find out more on the MoneyHelper website.

The Pensions Ombudsman deals with complaints about the administration or management of your pension scheme. You have the right to refer your complaint to the Pensions Ombudsman free of charge. Its determinations are legally binding and enforceable in court. You can find out more on The Pensions Ombudsman website.

Yours sincerely,

[Signature]

[Name of adjudicator]

Example: AADP Stage 1 employer decision letter

Dear [Full name],

Local Government Pension Scheme: Application for Adjudication of Disagreements Procedure Stage 1 decision

I have investigated the details of your disagreement and reached a decision under Stage 1 of the Application for Adjudication of Disagreements Procedure:

[Details should include:

Question for determination
Details of the disagreement
Decision (The decision itself should include relevant facts, evidence received/considered and any regulations considered)
The reason for decision

If the decision is based on a discretionary power contained in a policy made by the employer, include a copy of the policy or the relevant part of it, and a reference to the scheme regulation that allows the policy.]

This concludes the first stage of the Application for Adjudication of Disagreements Procedure (AADP). If you are not happy with my decision, you have the right to ask Derbyshire Pension Fund to further investigate your complaint under Stage 2 of the AADP. You must do this in writing, within 6 months from the date of this letter.

Further help