Employer Deducting Pension Contributions But Not Paid Anything To Pension Provider For A Year.

[arwyn]

Where do you stand when you discover your employer has been deducting your pension for years but your pension provider has not received a penny for a YEAR..

When employer was confronted he said he has an account of the total amount not paid and it will all be paid in in the next few weeks..

All pension pot is still there with provider but payments stopped a year ago.

TIA

[Hypognosis]

Depends if you want to press charges.

If they are not paying *your* contributions in, then I'm willing to bet they are taking what it called a "pensions holiday", which is where the company begs the regulators for special dispensation to stop paying money into all employees' pension pots, for an indeterminate number of years.

Usually, no-one notices but, if you change employers and then transfer your pension, you suddenly find that the employer-side shortfall directly impacts how much credit you are given in the new scheme.


In the meantime, the whole idea of how pension plans work is that interest earnt during the year is fed back into the pot and you compound that interest, year on year. If you are in your 20s now, the financial damage may only be in the 100s of pounds now but the knock-on effect on your age-65 pension would be exponentially larger.

DO NOT GET FOBBED OFF with "oh, I'm just paying it in now". You are being diddled out of *future interest earnings* as well.

Try Citizens' Advice Bureau and see if they can find you a financial advisor who can calculate the potential financial loss or at least set out your options and advice on the best course of action.

[arwyn]

Thank you for your reply.... It my husband he's 50yo and worked there for over 20 years. This last year has been weird in that the company has changed it's name a few times, his wage slips have kept changing.. He knew he was due his annual statement from his pension company and decided to ring them... He's just been told by them that nothing has been paid for a year... The other men have now rang to discover it's the whole workforce that's not had any pension paid for this last year..

[Dogsbody2]

This sounds like a defined contribution scheme, not a defined benefit scheme. Employer cannot take a pension holiday break from a dc scheme.
Sounds like fraud.

[arwyn]

Thanks Dogsbody2, some of the men are seeking legal advice.

[Hopkirk]

If the company finances are in such a state, he may well have to find a new job soon aswell.

[EDDIE51]

Make sure he keeps his pay statements showing that the deductions have been taken from his wages, they will be needed if there is a dispute.

[arwyn]

Hopkirk that's the worry now..

Eddie51 we have every payslip

Thank you both.

[Peter Pedant]

I think hubby's employer is going under to be honest.

clearly it is not HIS money to keep back but has to be used for the purpose for which it was deducted

He should ask / demand where the money is
like you know " Mr Boss the money was taken from me by you where is it now ? " It is not the boss-man money to do what he likes with ( interest free loan etc ) and the fact he has played fast and loose sounds bad

I HOPE it is in a separate account but probably has been mingled ( unfortunately for hubz )

whilst awaiting an answer - goggle quistclose
and or read this
http://www.ucl.ac.uk/laws/commercial/docs/ICR_Uncertainty_Quistclose1.pdf
you blood will run COOOOLD but you will see the importance
and there is a lot on quistclose

[Peter Pedant]

I would inform the pension company as well

[Dogsbody2]

People to turn to for advice are the Pensions Advisory Service. Google it for website. They run a phone helpline on 0300 123 1047.

[Peter Pedant]

well done dogz I knew you would come up with something sensible

[Peter Pedant]

i would do it tomorrow
from what you say there is a sense of urgency ....
,

[Hypognosis]

Thanks for Best Answer, Arwyn.

I just want to add that the Pensions Ombudsman is your last port of call. They usually will not look at a case until you have tried all "normal channels" i.e. thrashed it out with the employer and the pension provider and have not got a satisfactory outcome.

It is good that he managed to compare notes with fellow employees and discover the problem was systemic and more than just a glitch on his payroll setup. Normally, employers can rely on employees voluntarily keeping mum about their pay & benefits package.

If you do get a positive resolution, by all means post a fresh thread to let us know (this one will not reappear on "latest posts" once the OP is older than a few weeks).

Overall, we now see the relevance of compulsory employer-issued annual pensions statements.