Pensions opt out payments at Pembrokeshire Council ‘unlawful’

Pensions opt out payments at Pembrokeshire Council ‘unlawful’
29 January 2014

Appointed Auditor publishes report in the public interest

The decision to allow certain senior officers at Pembrokeshire Council to receive payments equivalent to the employers’ pension contributions if they opt out of the Local Government Pension Scheme (LGPS) - to avoid potential tax liabilities - was ‘unlawful’. And, subsequently, payments made – so they could make their own arrangements for saving for retirement - were also contrary to law, according to the Appointed Auditor, Anthony Barrett.

His Report in the Public Interest, issued today, concludes that the decisions were unlawful on a number of grounds:

  • The Council doesn’t have the power to remunerate staff to mitigate the effect of pension’s legislation.
  • In making the decision, relevant considerations were not taken into account (in breach of Wednesbury principles).
  • The Council failed to have due regard to the public sector equality duty.
  • The decision amounted to indirect discrimination.
  • Senior officers who had a disqualifying personal and pecuniary interest in the decision participated in the decision making process.

Appointed Auditor and Assistant Auditor General, Anthony Barrett, said today:

Pembrokeshire Council has acted unlawfully and urgently needs to rescind its decision around pensions opt-outs and stop any further payments to senior officers. The public should be able to expect the highest standards of decision making at local authorities and the Council must now address the procedural weaknesses I have identified in my report. It needs to demonstrate to its electorate that it is operating in accordance with the law and in line with good governance principles.

It is expected that by the end of March 2014 a total of £51,011 will have been paid to the Chief Executive and one other senior officer.

Today’s report also concludes that the payment made was not in line with the Council’s Senior Staff Committee decision that the arrangement would be on the basis of no additional cost to the Council.

Senior Officers’ Pay and Pensions - Pembrokeshire County Council - Report in the Public Interest