Pension Underpayment
Discussion
I'll preface by saying that I am a complete newbie when it comes to pensions, and I've only recently started getting my ducks in a row and trying to plan and manage all my finances more effectively..
First response you'll probably give is to speak to my employer / pension manager directly - I am in this process but it's being drawn out and I'm still awaiting contact and some actual information, so I'm asking here for (hopefully) some impartial advice..
So I was auto-enrolled in the workplace pension around 22 months ago. My employer (a very large national company) has it's own 'Savings Retirement Plan'. This was originally managed by BlackRock, and is now ran by Aegon (Scottish Equitable) as the latter bought the former. We've recently had letters with logins for our online accounts and instructions on how we can personally manage our pensions, which is what I have done and where I spotted the error (I believe).
However, the employer has also contributed the wrong percentage of the lower salary figure, so has underpaid by over £500 to my calculations.
This is how I've worked it out anyway, I've gone through the numbers a few times and the whole thing still kinda confuses me, but the error does seem clear and simple..
Obviously I still need to speak to someone and actually run through the issue. But based on the above, does this sound realistic?, and if it is confirmed that the error was made, would I be able to claim back the underpayment (minus the amount that I've personally underpaid, for fairness) and how would that usually go about happening?
All advice welcome!
First response you'll probably give is to speak to my employer / pension manager directly - I am in this process but it's being drawn out and I'm still awaiting contact and some actual information, so I'm asking here for (hopefully) some impartial advice..
So I was auto-enrolled in the workplace pension around 22 months ago. My employer (a very large national company) has it's own 'Savings Retirement Plan'. This was originally managed by BlackRock, and is now ran by Aegon (Scottish Equitable) as the latter bought the former. We've recently had letters with logins for our online accounts and instructions on how we can personally manage our pensions, which is what I have done and where I spotted the error (I believe).
- The Savings Retirement Plan Member's Manual states that the employee contribution level is 2.5% to 7.5%, and that the employer will 1:1 match that amount up to 7.5%. However on my online account it states that my contribution is 3% whereas there's is only 2%.
- The 'Pensionable Salary' figure that they have for me is wrong, by about £700. I've been on my current salary figure for at least 2 years, longer than this pension has been set up.
However, the employer has also contributed the wrong percentage of the lower salary figure, so has underpaid by over £500 to my calculations.
This is how I've worked it out anyway, I've gone through the numbers a few times and the whole thing still kinda confuses me, but the error does seem clear and simple..
Obviously I still need to speak to someone and actually run through the issue. But based on the above, does this sound realistic?, and if it is confirmed that the error was made, would I be able to claim back the underpayment (minus the amount that I've personally underpaid, for fairness) and how would that usually go about happening?
All advice welcome!
I'm no expert, but like many in the workplace, have had to try to get up to speed with pension management in the last few years.
I believe when you're looking at your "pensionable salary" - you're seeing a reduced amount due to the Salary Sacrifice aspect.
It offsets the amount you contribute & hence, you see a lower figure.
This is the only detriment to S/S. If you're applying for a mortgage, your actual salary appears lower.
However, you get more bang for your buck in your take home pay.
In regard to the 2%/3% aspect, you'd have to check with your payroll department. Does sound like you've been sold short.
My only other word of advice, if you can afford 7.5%, do it!
I believe when you're looking at your "pensionable salary" - you're seeing a reduced amount due to the Salary Sacrifice aspect.
It offsets the amount you contribute & hence, you see a lower figure.
This is the only detriment to S/S. If you're applying for a mortgage, your actual salary appears lower.
However, you get more bang for your buck in your take home pay.
In regard to the 2%/3% aspect, you'd have to check with your payroll department. Does sound like you've been sold short.
My only other word of advice, if you can afford 7.5%, do it!
mart73 said:
I'm no expert, but like many in the workplace, have had to try to get up to speed with pension management in the last few years.
I believe when you're looking at your "pensionable salary" - you're seeing a reduced amount due to the Salary Sacrifice aspect.
It offsets the amount you contribute & hence, you see a lower figure.
This is the only detriment to S/S. If you're applying for a mortgage, your actual salary appears lower.
However, you get more bang for your buck in your take home pay.
In regard to the 2%/3% aspect, you'd have to check with your payroll department. Does sound like you've been sold short.
My only other word of advice, if you can afford 7.5%, do it!
Yeah that's what makes it even more confusing.. I'll definitely be upping my contribution once I have confirmation that they'll match it haha..I believe when you're looking at your "pensionable salary" - you're seeing a reduced amount due to the Salary Sacrifice aspect.
It offsets the amount you contribute & hence, you see a lower figure.
This is the only detriment to S/S. If you're applying for a mortgage, your actual salary appears lower.
However, you get more bang for your buck in your take home pay.
In regard to the 2%/3% aspect, you'd have to check with your payroll department. Does sound like you've been sold short.
My only other word of advice, if you can afford 7.5%, do it!
But with regards to the figures, the 'pensionable salary' figure that it shows is my exact salary from about 3 years ago. I had an annual raise of about 2.25% at some point (more than 2 years ago) which equated my to current salary. But the pension account still seems to think I'm on my old salary, from what I can tell..
I'll need to sit down with someone and run through it all, it's all a bit complicated to me at this stage. But as I'm in the process of saving for a house and whatnot, I want to have all my finances in black and white and on the right path
Well they've got back to me claiming that I'm currently contributing 2.5% and they are matching that, and that they've contacted the pension provider to correct their details (which they have done - the home page of my pension account now shows 2.5% and the same monetary figure each), but the 'Statements' section of the site shows the employer putting in around £43/month for the past year or so, and my payslip for the past few months shows about £55/month.. so I'm honestly not sure what's going on.
I'm also annoyed that both contributions are now only 2.5% rather than 3% (eg. theirs matched to mine, rather than mine being lowered to match) - so I need to request another change so that we're both putting in around 5%
I'm also annoyed that both contributions are now only 2.5% rather than 3% (eg. theirs matched to mine, rather than mine being lowered to match) - so I need to request another change so that we're both putting in around 5%
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