Ombudsman s Determination

Transcription

1 Ombudsman s Determination Applicant Mr J G Turnbull Scheme Armed Forces Pension Scheme 1975 (AFPS 75) Respondent(s) Veterans UK Complaint summary Mr Turnbull has complained that he has not been granted a pension and lump sum for the period 30 September 1997 to 31 January Summary of the Ombudsman's determination and reasons The complaint should not be upheld against Veterans UK because Mr Turnbull s service between 30 September 1997 and 31 January 1998 was not pensionable. 1

2 Detailed Determination Material facts Mr Turnbull retired from the RAF in He became a deferred member of the AFPS 75. In September 1997, Mr Turnbull was re-employed by the RAF. In a letter dated 7 November 1997, the RAF Personnel Management Agency (PMA) responded to a query concerning Mr Turnbull s re-employment. The PMA referred to AP 400B-0001 Leaflet 303 and said, It is for just these sorts of occasions that the terms and conditions of service at Reference B [the above leaflet] were designed, at least for periods not normally exceeding one year, and Service with the RAF may be applied in the cases you describe as follows: a. Flt Lt J G Turnbull (608750L). Pending the introduction of Full Time Reserve Service (FTRS) and subject to the agreement of OC No 3 MHU, Flt Lt Turnbull is approved for Service with the RAF from 30 Sep 97 to 31 Mar 98, or an earlier date dictated by the provision of FTRS and the requirements of HQ 11/18 Gp in this respect There is no requirement for any further documentation with regard to the above approval for service with the RAF. As requested, an advance copy of Leaflet 105 to AP 400B is attached 3. The PMA then wrote to Mr Turnbull on 2 February They explained the background to the introduction of Full Time Reserve Service (FTRS) and said that this had involved a lengthy process of negotiation on terms and conditions. The PMA said that the RAF had been determined to ensure that reservists who committed themselves to a period of FTRS should receive an employment package commensurate with full time employment. They identified the opportunity to join an occupational pension scheme as a key element of this. The PMA said that waiting for the introduction of a suitable pension scheme had added to the delay in introducing FTRS. 4. The PMA went on to say that, at that point, it was relatively straightforward for anyone who had not been serving with the RAF for a lengthy period to take up FTRS. However, they then said, the position is not so clear cut for those who, like you, have now served long enough to re-enter the Armed Forces Pension Scheme (AFPS). Although both FTRS and Regular service are pensionable under the AFPS, there are differences in the way that benefits are accrued. Because of these differences, and to prevent employers from unilaterally imposing different pension conditions, legislation requires that there must be a minimum break of one month before new conditions can be applied. Clearly this is a situation 2

3 that we would both wish to avoid. Legal advice has been sought to allow us to evaluate whether we have sufficient grounds to seek a waiver to this rule. In the interim, we are considering alternative management options which might provide a satisfactory solution to us both in the event that a waiver cannot be obtained. Finding an acceptable solution to this legal conundrum is going to take time. It remains our intention to manage your change from service with the RAF to FTRS as seamlessly as possible; since it is unlikely that agreement on how we will achieve that aim will be finalised prior to 1 April 98, and to remove the uncertainty which is bound to increase as that date approaches, I have received approval for you to continue on your current terms until 20 September Since you are serving under AP400B-0001 Leaflet 303 para 2a, you need take no action; if, at any stage, you do not wish to continue serving full time as at present, you need do no more than let your Commanding Officer know of your decision 5. The PMA wrote to Mr Turnbull again on 23 February They referred to a letter dated 20 February 1998 in which Mr Turnbull had been advised that his application for a full commission had been successful. The PMA said his FTRS(FC) Commitment was attached (AP 400B-0001, Lft 105 Annex B). This was to comprise his formal offer and the terms and conditions. Mr Turnbull was asked to sign and return the Commitment. The PMA said, once he had done this, his FTRS(FC) would be backdated to 1 February They said Mr Turnbull would be entitled to be paid at the rate for a FTRS(FC) flt lt after 6 years in the rank. The letter continued, Your pay and increment entitlement is as follows: a When you were appointed to a commission in the RAuxAF on 23 Sep 96, you entered the pay scale at the Flt Lt on appointment rate. b 83 You are given credit for your RAF service as a flt lt 1 Mar 71 to 19 Apr c You are given credit for your service with the RAF as a RAuxAF flt lt from 30 Sep 97 to 31 Jan 98; a total of 4 mths. Your entitled rate of pay from 30 Sep 97 to 30 Nov 97 was and from 1 Dec 97 to 31 Jan 98 was d FTRS pay is incremental but, as you are entering the pay scales at the top rate for flt lt, you will have no entitlement to increments 6. In March 2011, Mr Turnbull s FTRS came to an end. Veterans UK (then called the Service Personnel & Veterans Agency) initially notified Mr Turnbull that his FTRS benefits would be based on reckonable service from 1 February He did not agree. Veterans UK then wrote to Mr Turnbull, on 29 March 2011, informing him that his Regular Service Pension would be 7, per year from 23 March 2011 and his FTRS pension would be 5, per year. Veterans UK said that, because Mr Turnbull had additional service from 1 November 1997, there was also a balance of 3

4 Terminal Grant due amounting to They said that the reason they had referred to 1 November 1997 was because this was the start date for FTRS as per the pension scheme rules. 7. Mr Turnbull did not agree with this. Veterans UK sought further guidance from the PS Policy Branch. They wrote to Mr Turnbull, on 19 October 2011, saying that they had been told that the FTRS pensionable terms were not introduced until 1 February 1998 and that his benefits must be calculated by reference to this start date. Veterans UK said that Mr Turnbull s preserved pension in the older FTRS Scheme would be 4, per year from 15 January 2006 instead of 4, This increased to 4, from Mr Turnbull s 60 th birthday. A re-employment abatement applied because Mr Turnbull was still in service. Veterans UK calculated Mr Turnbull s pension entitlement from March 2007 to April 2011, and said that he had been overpaid by In response to a query from Mr Turnbull, Veterans UK confirmed that they were unable to obtain copies of the Leaflet 303 or Leaflet At stage one of the Scheme s internal dispute resolution (IDR) procedure, Veterans UK said that it had been acknowledged in the 1990s that members of the Reserve Forces were being disadvantaged because they had no entitlement to pension benefits. They said that the Reserve Forces Act 1996 (RFA 96) had put in place provisions for pensions to be paid to members of the Reserve Forces but it was not until 1 February 1998 that the MoD was able to recruit personnel under RFA 96 terms. Veterans UK said that the pension scheme amendments had not been retrospective. They confirmed that Mr Turnbull had service with the RAuxAF from 30 September 1997 to 31 January 1998, but said that he had not completed an FTRS contract for that period because they were not available. This decision was confirmed at stage two of the IDR procedure. 10. Veterans UK have now been able to locate a copy of AP 3392 Vol 7 Leaflet 105 published in March This states that it supersedes AP 400B-0001 and, in the introduction, that it is a republication of AP 400B-0001 (1 st Edition). This Leaflet 105 contains information about FTRS, including such things as length of commitment and call-out liabilities. It contains the application form and contracts for FTRS. It also contains the terms and conditions of service for FTRS. Under the heading Basic Pay, the Leaflet states, Previous qualifying service on either FTRS or Regular terms (including service with the RAF and called-out service) is aggregated and counts towards overall reckonable service when identifying the entry point of the pay scale for FTRS pay. 4

5 11. Under the heading Pensions and Attributable Benefits, the Leaflet states, The regulations governing pensions, retired pay and attributable benefits for personnel employed on FTRS terms and conditions of service after leaving regular service are contained in Chapter 48 of QRs(RAF) The regulations concerning pensionability of FTRS(FT) are at Chapter 49 of QRs(RAF). 12. Veterans UK were also able to provide a statement setting out the history behind pension provision for reserve forces. This referred to applications made to the Industrial Tribunal, between 1995 and 1997, by some of around 50 RAuxAF reservists who were working full-time for the RAF but receiving casual pay with no benefits. The Tribunal determined the matter was not within their jurisdiction but it prompted a review. According to the statement, all affected volunteers were taken into regular service (on Short Term Regular Commissions or Short Term Regular Engagements) until 31 December They were then required to return to RAuxAF rates of pay for one month before rejoining on the newly introduced FTRS terms on 1 February Further research by the AFPS Policy Section located a copy of AP 400B-0001 Leaflet 303. Under the heading Service with the RAF, it explains that an officer would not be debarred from applying for a commission in the RAF by reason of a commission in the RAFR or RAuxAF. The Policy Section has confirmed that Mr Turnbull was employed as a full-time Reservist between 30 September 1997 and 31 March 1998 and was not employed on either a Short Term Regular Commission or a Special Service Commission. They have explained that he was contracted into the state pension scheme and subject to National Insurance deductions. Summary of Mr Turnbull s position 14. Mr Turnbull says he was re-employed on a Service with the RAF basis pending the formal introduction of Full Time Reserve Service. He says his service was converted to FTRS on 1 February He points out that he was in continuous service with the RAF from September 1997 until March 2011 but his pension has only been based on service since February Mr Turnbull considers that Veterans UK have ignored the terms and conditions of his Service with the RAF and focussed solely on his FTRS. He refers to the letter of 2 February 1998, which stated he had served long enough to re-enter the AFPS. He also refers to the letter of 7 November 1997 which gave approval for his Service with the RAF. 16. Mr Turnbull has referred to paragraphs 2928(1)(a) and 3017(1)(b) of the Queen s Regulations, Chapters 41 and 44 (see appendix). He quotes 3017, Reckonable service for the purpose of determining entitlement to pension will include 5

6 And 2928, (b) Service as a commissioned officer which would count as reckonable service under para 2928 Qualifying service for Retired Pay includes (1)(a) Full pay service in the Armed Forces of the UK. 17. Mr Turnbull argues that he fulfilled both of the above requirements 18. Mr Turnbull refers to the PMA letter dated 23 February He says this confirms that his rank was a Flight Lieutenant (a commissioned officer). He says it gave him credit for four months service for Service with the RAF from 30 September 1997 to 31 January 1998 on full pay terms and not casual pay. He says he was paid on a full time basis and given paid leave, including bank holidays, and medical services. He points out that he was paid at the maximum rate for his rank, which would not have been the case had he been a reservist. He points out that his annual pay for December 1997 to January 1998 is the same as his annual pay from 1 February 1998 under FTRS. He argues this indicates that he must have been on full pay terms during the disputed four month period. 19. Mr Turnbull refers to the PMA letter dated 2 February 1998 which said he had already served long enough to re-enter the AFPS. He says this letter confirms that he was already serving full time; i.e. that he was a regular. He believes the letter would not have been written if he had only been on casual terms of service. In response to Veterans UK s statement that he was a reservist, he says he was for the period from January to August 1997 and received casual pay for the days he worked. He says once his Service with the RAF had been approved, his conditions changed and he was on full pay terms. 20. Mr Turnbull argues that, for the period 30 September 1997 to 31 January 1998, he was employed as a commissioned officer on full pay service and met the criteria set out in the Queen s Regulations. Summary of Veterans UK s position 21. Veterans UK have referred to their responses at IDR stages one and two. Conclusions 22. It is accepted that Mr Turnbull served with the RAuxAF from 30 September 1997 to 31 January The Reserve Forces Act 1996 received royal assent in January Section 8 provided for orders or regulations to be made under the Act to provide for the payment of pensions, allowances or gratuities to members of the reserve forces. Prior to this, reserve forces had been subject to the Reserve Forces Act This did not make any specific reference to pensions for members of the RAuxAF. 6

7 24. It is clear from the contemporary correspondence which has been provided that the provision of pensions for those in the reserve forces was under review. There was no pension provision for those serving in the RAuxAF prior to 1 February The way around the problem prior to the introduction of FTRS was to bring reservists into regular service temporarily which would allow them access to the AFPS 75. However, this approach was not adopted in Mr Turnbull s case. 25. Mr Turnbull was serving on a Service with the RAF basis for the period in question. Whilst it is clear, from the correspondence, this term had a specific meaning at the time, it is not clear what that meaning was. There is reference to AP 400B-0001 Leaflet 303 in the correspondence Mr Turnbull received at the time. There is reference to Service with the RAF in AP 400B-0001 Leaflet 303 but only to provide that a commission in the RAuxAF would not be a bar to applying for a commission in the RAF. 26. In view of what has been said about the use of short term commissions to address the problem of pension provision for reservists, it might be expected that Service with the RAF meant that. That is, for the period from 30 September 1997, to the introduction of FTRS, Mr Turnbull would serve as a regular with the RAF. However, Veterans UK have confirmed that Mr Turnbull remained a reservist for this period and was not employed on either a Short Term Regular Commission or a Special Service Commission. 27. Mr Turnbull seeks to argue that he was not a reservist on the basis that he was in receipt of full pay and holidays. The evidence (such as it is) suggests otherwise. The PMA letter of 23 February 1998, confirms that he was appointed to a commission in the RAuxAF on 23 Sep It confirms that his FTRS(FC) commission will be backdated to 1 February Whilst the letter goes on to say that Mr Turnbull will be given credit for his Service with the RAF as a RAuxAF flt lt from 30 Sep 1997 to 31 Jan 1998, this is in the context of his pay; that is, his entry point on the pay scale. It says nothing about pension entitlement. If anything, the letter confirms that Mr Turnbull was a reservist (in the RAuxAF) for the period in question. 28. I have considered paragraphs 2928 and 3017 of the Queen s Regulations referred to by Mr Turnbull. For service as a commissioned officer to count as reckonable service (service which would be counted for the purposes of calculating a pension), it must be service which would count under paragraph Paragraph 2928 refers to periods of service in the auxiliary and reserve forces where these are periods on full pay as an officer (for the purposes of training). However, paragraph 2926 indicates that Section 2 applies to officers holding pensionable commissions who leave the Active List on or after 1 April This does not include Mr Turnbull for the period in question. I do not find that paragraphs 2928 or 3017 assist Mr Turnbull s case. 29. Regardless of whatever meaning attached to the term Service with the RAF at the time, the only way in which Mr Turnbull could have been allowed access to the AFPS 75 for the period 30 September 1997 to 31 January 1998, was by becoming a regular. This was not the case and his service for that period was non-pensionable. 7

8 Veterans UK must calculate his benefits by reference to a start date of 1 February He was not, therefore, entitled to the additional payment of for the period from 1 November Mr Turnbull s complaint is not upheld. 30. I agree that it is unsatisfactory that the MoD and Veterans UK have been unable to provide copies of leaflets which were relied upon at the relevant time. Whilst it may be the case that these leaflets are now obsolete, they remain relevant to those individuals whose terms and conditions referred to them. However, this is not sufficient for me to be able to find that Mr Turnbull has an entitlement to a pension for the period in question when the available evidence indicates otherwise. 31. Veterans UK are entitled to seek recovery of the overpayment. However, they should also give Mr Turnbull the opportunity to submit any evidence he might have to establish a defence against recovery; such as a change of position in reliance on the payment. Anthony Arter Pensions Ombudsman 20 November

9 Appendix Queen s Regulations Chapter 40 and Paragraph 2928 comes under Section 2 of Chapter 40 Service Retired Pay, Service Invaliding Retired Pay, Service Attributable Retired Pay, Terminal Grants, Service Invaliding Gratuities, Additional Attributable Gratuities. Paragraph 2926 states, Applicability of Regulations. The provisions of this Section relate, except where otherwise stated, to officers holding pensionable commissions who leave the Active List on or after 1 April The provisions of para 2938(3) and 2945 may apply, at the discretion of the Defence Council, to officers serving on Short Service gratuity-earning Commissions 33. Paragraph 2928 states, Qualifying Service for Retired Pay, Terminal Grant, Gratuity. (1) The undermentioned periods may be included in assessing qualifying service for awards under this Section (a) Periods on full pay as an officer for the purpose of training, while a member of the auxiliary and reserve forces, except broken periods of less than six months duration 34. Paragraph 2929 states, Reckonable Service for Retired Pay. Reckonable Service for retired pay shall be all qualifying service, as defined in para 2928, given after attaining age 21 up to a maximum of 34 years except service during which the officer has opted out of the Armed Forces Pension Scheme. 35. Paragraph 3017 comes under section 1 of Chapter 41 Service Pensions, Service Invaliding Pensions, Service Attributable Pensions. Paragraph 3016 states, Applicability of Regulations. (1) The provisions of this Section apply, to airmen discharged or transferred to the Reserve on, or after, 31 March 1996 (ie whose last day of service on full pay was 31 March 1996, or later). (2) They do not apply to: (a) Personnel entered into the RAF on special conditions of service eg personnel of the RAF(Malta) and the RAF(Malaysia), except as may be specially provided in the conditions of service 9

10 36. Paragraph 3017 states, Reckonable Service. (1) Reckonable service for the purpose of determining entitlement to pension will include (b) Service as a commissioned officer which would count as reckonable service under para