Galpin v Lancashire Combined Fire Authority

For an ill-health pension under the Fireman’s Pension Scheme Order 1992, a notional retirement pension capped by actual average pensionable pay is calculated using the firefighter’s average pensionable pay during the final year of actual service. The phrase “by reference to” does not require speculation about promotions or future pay progression before normal retirement age. Administrative guidance cannot alter the statutory scheme and, read in context, references to what could have been earned by compulsory retirement age concern possible additional years of service, not hypothetical promotion or salary.

Mr Galpin, a retired firefighter, challenged a Deputy Pensions Ombudsman decision declining his complaint that his ill-health pension had been calculated under the wrong provision. He argued that paragraph 5 of Part 3 of Schedule 2 to the Fireman’s Pension Scheme Order 1992 required the notional retirement pension to reflect the promotion he might have achieved before compulsory retirement age.

Falk J extended time for the appeal but refused permission on the papers. The renewed application concerned whether “by reference to” actual average pensionable pay required the use of pay at the date of early retirement or a forecast of promotion and pay progression to normal retirement age.

1. The renewed application for permission to appeal was refused. The proposed appeal had no realistic prospect of success.

2. Paragraph 5(1) of Part 3 of Schedule 2 imposes a cap where the pension otherwise calculated under paragraphs 3 or 4 exceeds the notional retirement pension. Under paragraph 5(2), that notional pension is calculated by reference to the person’s actual average pensionable pay.

3. Read with rule G1, “actual average pensionable pay” means the average pensionable pay during the year ending with the relevant date, namely the last day of service as a regular firefighter. The words “by reference to” operate as a synonym for “using”. They do not require the administrators to assess or predict promotion that might have occurred between early retirement and the normal retirement age.

4. There was no machinery in the scheme for forecasting such promotion, and nothing in its wording indicated that a speculative exercise was required. The statutory scheme therefore could not be construed to include hypothetical future promotion or pay.

5. The Home Office commentary had no statutory force. Although its reference to what could have been earned by compulsory retirement age was capable of ambiguity, the context and examples showed that it referred to the potential length of service, subject to the 40-year maximum, rather than future average pensionable pay or promotion.

6. The court considered Falk J’s reasoning correct and refused permission to appeal.

1. High Court (Chancery Division): On 3 July 2020, the renewed application for permission to appeal was refused.
2. High Court (Chancery Division): Falk J extended time on 2 April 2020 but refused permission to appeal, finding the proposed statutory-construction argument unarguable. The renewed application followed an adjournment order dated 6 May 2020.
3. Pensions Ombudsman: On 10 September 2019, the Deputy Pensions Ombudsman declined to uphold the complaint concerning the calculation of the ill-health pension.