NEST - Auto Enrolment Pension scheme
Discussion
A question about the auto-enrolment scheme.
I started to do some digging as my company setup/joined the auto-enrolment pension scheme about 2 years ago. We are a small company of about 10 people with 5 of us as PAYE. We use an outside Accountancy firm but we have a lady in the office who deals with the day to day accounts side and is the one who does all the liaising with said 3rd party accountancy firm.
Anyway a few weeks back I asked our accounts lady who the auto-enrolment pension was set up with as I thought I''m paying out this money with no information about where it's going.
She spoke to the 3rd party accountants who confirmed it was NEST. I then tried to login via the website but none of my details could be found and to ring them. I left it from then till last week and tried again, same result online and told to ring, so I phoned up Friday just gone and had it confirmed that indeed my details have never been entered into NEST.
So today I spoke to our accounts lady who was a little confused by it all and gave me the 3rd party accountants number to ring. I spoke to them and they informed me that whilst they create my paycheck and add the auto-enrol payment onto it, it is up to the company to enrol us with Nest and make the payment.
So effectively whilst the money has been coming out of my pay it has not been going into my pension pot.
Now I know this is 100% a miscommunication error between the 3rd party accountants and our in-house accounts admin team whom I have spoken with, they believed that the 3rd party accountants did all the necessary work and that was that. I fully believe my company will pay the backlog that is owed from the last 2 years as this is a genuine mistake, however even if the lump sum is paid into my NEST account now, will I have lost any investment money that would have accrued from it over the last 2 years?
I started to do some digging as my company setup/joined the auto-enrolment pension scheme about 2 years ago. We are a small company of about 10 people with 5 of us as PAYE. We use an outside Accountancy firm but we have a lady in the office who deals with the day to day accounts side and is the one who does all the liaising with said 3rd party accountancy firm.
Anyway a few weeks back I asked our accounts lady who the auto-enrolment pension was set up with as I thought I''m paying out this money with no information about where it's going.
She spoke to the 3rd party accountants who confirmed it was NEST. I then tried to login via the website but none of my details could be found and to ring them. I left it from then till last week and tried again, same result online and told to ring, so I phoned up Friday just gone and had it confirmed that indeed my details have never been entered into NEST.
So today I spoke to our accounts lady who was a little confused by it all and gave me the 3rd party accountants number to ring. I spoke to them and they informed me that whilst they create my paycheck and add the auto-enrol payment onto it, it is up to the company to enrol us with Nest and make the payment.
So effectively whilst the money has been coming out of my pay it has not been going into my pension pot.
Now I know this is 100% a miscommunication error between the 3rd party accountants and our in-house accounts admin team whom I have spoken with, they believed that the 3rd party accountants did all the necessary work and that was that. I fully believe my company will pay the backlog that is owed from the last 2 years as this is a genuine mistake, however even if the lump sum is paid into my NEST account now, will I have lost any investment money that would have accrued from it over the last 2 years?
The first thing to highlight is that your employer is 100% responsible for this under the law.
The third party accountant is completely correct in what they have said.
Your employer needs to sort this our PDQ of they are going to get a big fine. Part of sorting this out has got to be establishing any investment loss and putting this right for you and any other employees impacted by this.
Just paying the money into the scheme does not cut it quite frankly.
You have a legal right to have had these contributions invested on time and any shortfall in the value of these funds is entirely down to your employer to make good upon.
The third party accountant is completely correct in what they have said.
Your employer needs to sort this our PDQ of they are going to get a big fine. Part of sorting this out has got to be establishing any investment loss and putting this right for you and any other employees impacted by this.
Just paying the money into the scheme does not cut it quite frankly.
You have a legal right to have had these contributions invested on time and any shortfall in the value of these funds is entirely down to your employer to make good upon.
JulianPH said:
The first thing to highlight is that your employer is 100% responsible for this under the law.
The third party accountant is completely correct in what they have said.
Your employer needs to sort this our PDQ of they are going to get a big fine. Part of sorting this out has got to be establishing any investment loss and putting this right for you and any other employees impacted by this.
Just paying the money into the scheme does not cut it quite frankly.
You have a legal right to have had these contributions invested on time and any shortfall in the value of these funds is entirely down to your employer to make good upon.
Thanks Julian, I certainly don't want my employer to get a fine or in any trouble over this. I really enjoy working here and My boss has always been very fair with all of us and I'm sure he'll do everything in his power to get this resolved ASAP now it's come to light. As you've covered though I was unsure if there would be an 'investment loss' which from your description it sounds like there will be, and as much as I like it here, I don't want to be short changed. I just wanted to be sure so I can raise the point in case moving forwards all that is offered is the back payments without any interest added on.The third party accountant is completely correct in what they have said.
Your employer needs to sort this our PDQ of they are going to get a big fine. Part of sorting this out has got to be establishing any investment loss and putting this right for you and any other employees impacted by this.
Just paying the money into the scheme does not cut it quite frankly.
You have a legal right to have had these contributions invested on time and any shortfall in the value of these funds is entirely down to your employer to make good upon.
If there has been any maladministration, as it looks to be the case from your post, then you can make a complaint to the party responsible (your employer I suspect as they have subcontracted their responsibility to the accountants), and set out what you consider needs to be done to be to resolve your complaint. Obviously, you want them to pay over the amounts deducted from your pay and also the contributions that your employer is legally liable for as well, and then you want them to also pay over the lost investment. NEST should be able to calculate this investment loss. Then you want to ensure that your employer regularly pays over to NEST your own and their future contributions.
If your employer does not respond satisfactorily to your complaint you can contact the office of the Pensions Ombudsman who is all set up to deal with pension related complaints. The PO's office is very familiar with the auto enrolment requirements and all other pension legislation, of course, and has dealt with many complaints about auto enrolment. The website is www.pensions-ombudsman.org.uk.You can complete the PO's form and send it online if matters get to that stage. Note that the PO will not investigate complaints until you have raised the matter with your employer and got an unsatisfactory response. It could be considered that you may have done this already, not in writing but verbally. There are no fees to be paid to PO: the service is free.
Could be that you are not the only employee in the same situation with your employer.
R.
If your employer does not respond satisfactorily to your complaint you can contact the office of the Pensions Ombudsman who is all set up to deal with pension related complaints. The PO's office is very familiar with the auto enrolment requirements and all other pension legislation, of course, and has dealt with many complaints about auto enrolment. The website is www.pensions-ombudsman.org.uk.You can complete the PO's form and send it online if matters get to that stage. Note that the PO will not investigate complaints until you have raised the matter with your employer and got an unsatisfactory response. It could be considered that you may have done this already, not in writing but verbally. There are no fees to be paid to PO: the service is free.
Could be that you are not the only employee in the same situation with your employer.
R.
The Leaper said:
If there has been any maladministration, as it looks to be the case from your post, then you can make a complaint to the party responsible (your employer I suspect as they have subcontracted their responsibility to the accountants), and set out what you consider needs to be done to be to resolve your complaint. Obviously, you want them to pay over the amounts deducted from your pay and also the contributions that your employer is legally liable for as well, and then you want them to also pay over the lost investment. NEST should be able to calculate this investment loss. Then you want to ensure that your employer regularly pays over to NEST your own and their future contributions.
If your employer does not respond satisfactorily to your complaint you can contact the office of the Pensions Ombudsman who is all set up to deal with pension related complaints. The PO's office is very familiar with the auto enrolment requirements and all other pension legislation, of course, and has dealt with many complaints about auto enrolment. The website is www.pensions-ombudsman.org.uk.You can complete the PO's form and send it online if matters get to that stage. Note that the PO will not investigate complaints until you have raised the matter with your employer and got an unsatisfactory response. It could be considered that you may have done this already, not in writing but verbally. There are no fees to be paid to PO: the service is free.
Could be that you are not the only employee in the same situation with your employer.
R.
Let me stress I'm not looking to get my company in any trouble FULL STOP!If your employer does not respond satisfactorily to your complaint you can contact the office of the Pensions Ombudsman who is all set up to deal with pension related complaints. The PO's office is very familiar with the auto enrolment requirements and all other pension legislation, of course, and has dealt with many complaints about auto enrolment. The website is www.pensions-ombudsman.org.uk.You can complete the PO's form and send it online if matters get to that stage. Note that the PO will not investigate complaints until you have raised the matter with your employer and got an unsatisfactory response. It could be considered that you may have done this already, not in writing but verbally. There are no fees to be paid to PO: the service is free.
Could be that you are not the only employee in the same situation with your employer.
R.
I'm not looking to complain or get anything more than I'm owed, you've rightly pointed out the 5 of us on the books as PAYE will all be in the same boat. As long as I get back the payments that were deducted from my salary over the last 2 years or so and now as I understand it with the interest rate NEST can calculate I'll be perfectly happy.
My boss/company owner works really hard/goes far beyond the call of duty to ensure we have new projects coming in and to oversee and advise on all of the projects managed by his team. We are a small company/team and this is a genuine mistake caused by a lack of communication between the 3rd party accountants and our in-house accounts girl. I know my boss will want to rectify this ASAP, he just doesn't normally have time to oversee this side of the business and leaves it to the accounts team unless of course a situation like this arises.
...if this had been the last company I worked for, I'd have been trying to throw the book at them!
The main reason i was asking was to find out if I'd be owed any interest or not and it sounds as though I will be, so thanks all for the help.
Jasey_ said:
Dont forget the "interest" on the Tax Relief you should also have received from the payments you should have been accruing.
In the last 2 years it likely your employer would have contributed 80% of your contributions and the tax relief something like 20% of your contributions.
Going to be a nice one for them to sort out !
I don't understand what you mean here sorry?In the last 2 years it likely your employer would have contributed 80% of your contributions and the tax relief something like 20% of your contributions.
Going to be a nice one for them to sort out !
jackofall84 said:
Jasey_ said:
Dont forget the "interest" on the Tax Relief you should also have received from the payments you should have been accruing.
In the last 2 years it likely your employer would have contributed 80% of your contributions and the tax relief something like 20% of your contributions.
Going to be a nice one for them to sort out !
I don't understand what you mean here sorry?In the last 2 years it likely your employer would have contributed 80% of your contributions and the tax relief something like 20% of your contributions.
Going to be a nice one for them to sort out !
These need to be factored into everything, but the easiest way or doing this is for your employer to make a one off gross contribution for all missed payments and any investment loss.
This will therefore cover everything in one hit.
Moving forward, if you are a higher rate taxpayer and your personal contributions are made net of tax then NEST will reclaim the basic rate income tax within your pension and you will need to reclaim the higher rate tax relief directly through your tax return.
This is a separate matter though and focusing on restoring the past mistakes is the first thing.
Give me a shout if I can be of any help in both matters (or just if there is anything about this you would like further clarity on).
Jasey - thanks for cheering me up at half time yesterday mate!!!
Thanks for all the responses so far, I've seen a lot of nonsense posted on PH lately so it's really refreshing to see some very useful facts being posted.
I believe the tax savings are already accounted for, as my payslip is 100% correct and the accounts girl just pays me my net pay calculated by the 3rd party accountants.
The problem is whilst the money has been deducted from my net pay and shown on my payslip it has not been added into my NEST pot and I assume my employers contribution has also not been added in either.
The only advantage we have here is that the majority of us are mechanical engineers and are able to calculate the losses due to having a love of maths, challenges and spreadsheets.
I believe the tax savings are already accounted for, as my payslip is 100% correct and the accounts girl just pays me my net pay calculated by the 3rd party accountants.
The problem is whilst the money has been deducted from my net pay and shown on my payslip it has not been added into my NEST pot and I assume my employers contribution has also not been added in either.
The only advantage we have here is that the majority of us are mechanical engineers and are able to calculate the losses due to having a love of maths, challenges and spreadsheets.
jacko,
It's not a matter of not wanting to get your employer into trouble. The fact is they are breaking the law, and you are suffering financially as a result, and the sooner all this is sorted out the better. Furthermore, it could be said that you are helping them to comply with the law AND by so doing helping them avoid being heavily fined for their non compliance.
R.
It's not a matter of not wanting to get your employer into trouble. The fact is they are breaking the law, and you are suffering financially as a result, and the sooner all this is sorted out the better. Furthermore, it could be said that you are helping them to comply with the law AND by so doing helping them avoid being heavily fined for their non compliance.
R.
Jasey_ said:
I believe NEST do two types of payment - either before or after you have paid tax on your salary.
We have a NEST pension and my payments are deducted after I have paid tax.
Which means I get 20% added into my Pension by the government.
eg If I have £100 taken out of my pay I actually get £120 paid into my NEST Account - £100 from me and then £20 a couple of weeks later which comes from the government as tax relief.
This is in addition to the money paid in by my employer.
https://www.nestpensions.org.uk/schemeweb/memberhe...
Sorry to get all technical on you, but if you pay in £100 net the tax relief at source is £25.We have a NEST pension and my payments are deducted after I have paid tax.
Which means I get 20% added into my Pension by the government.
eg If I have £100 taken out of my pay I actually get £120 paid into my NEST Account - £100 from me and then £20 a couple of weeks later which comes from the government as tax relief.
This is in addition to the money paid in by my employer.
https://www.nestpensions.org.uk/schemeweb/memberhe...
If you pay in £80 net the tax relief as source is £20.
You need to gross your contribution up!
Your half time Photoshop skills did cheer me up and if it of any reassurance I have no idea how to do that!!!
Hi All,
I know a lot of these posts never get resolved so I thought I'd give an update. The bottom line is none of us on the books at my company have had our NEST account setup or had any money paid over in over the last year and the situation is still on-going. Ultimately it is my MDs responsibility to ensure this has happened but on this occasion I feel the 3rd party accountants are more to blame. The MD is more like one of the team members here getting involved in the projects and quoting/sourcing more work, he has no interest in wages or accounts etc. Hence why he subs it out to an accountant, as far as he and our accounts admin girl were concerned they'd told the accountant to set up everybody's pensions and seeing as the money was coming out on the wage slips they seemed to think it was all going fine. Accountant then informed them that although he had setup the NEST account and altered the wages and wage slips, it was up to the MD to enter the employees details onto NEST which he didn't tell anyone at my company. So the accounts girl started to look into it but NEST wouldn't help her as she was not the delegated person on the NEST account, my MD then tried only to find out he was not the delegated person appointed on the NEST account which means they couldn't add employee details...it is in fact the accountant who has appointed himself as the NEST delegated appointed person on the NEST account and therefore it is his responsibility to add the employee details. The situation is still on-going between our accounts girl and the accountant.
I know a lot of these posts never get resolved so I thought I'd give an update. The bottom line is none of us on the books at my company have had our NEST account setup or had any money paid over in over the last year and the situation is still on-going. Ultimately it is my MDs responsibility to ensure this has happened but on this occasion I feel the 3rd party accountants are more to blame. The MD is more like one of the team members here getting involved in the projects and quoting/sourcing more work, he has no interest in wages or accounts etc. Hence why he subs it out to an accountant, as far as he and our accounts admin girl were concerned they'd told the accountant to set up everybody's pensions and seeing as the money was coming out on the wage slips they seemed to think it was all going fine. Accountant then informed them that although he had setup the NEST account and altered the wages and wage slips, it was up to the MD to enter the employees details onto NEST which he didn't tell anyone at my company. So the accounts girl started to look into it but NEST wouldn't help her as she was not the delegated person on the NEST account, my MD then tried only to find out he was not the delegated person appointed on the NEST account which means they couldn't add employee details...it is in fact the accountant who has appointed himself as the NEST delegated appointed person on the NEST account and therefore it is his responsibility to add the employee details. The situation is still on-going between our accounts girl and the accountant.
jackofall84 said:
Hi All,
I know a lot of these posts never get resolved so I thought I'd give an update. The bottom line is none of us on the books at my company have had our NEST account setup or had any money paid over in over the last year and the situation is still on-going. Ultimately it is my MDs responsibility to ensure this has happened but on this occasion I feel the 3rd party accountants are more to blame. The MD is more like one of the team members here getting involved in the projects and quoting/sourcing more work, he has no interest in wages or accounts etc. Hence why he subs it out to an accountant, as far as he and our accounts admin girl were concerned they'd told the accountant to set up everybody's pensions and seeing as the money was coming out on the wage slips they seemed to think it was all going fine. Accountant then informed them that although he had setup the NEST account and altered the wages and wage slips, it was up to the MD to enter the employees details onto NEST which he didn't tell anyone at my company. So the accounts girl started to look into it but NEST wouldn't help her as she was not the delegated person on the NEST account, my MD then tried only to find out he was not the delegated person appointed on the NEST account which means they couldn't add employee details...it is in fact the accountant who has appointed himself as the NEST delegated appointed person on the NEST account and therefore it is his responsibility to add the employee details. The situation is still on-going between our accounts girl and the accountant.
Surely the accounts lady and/or MD would realise not payments were going to NEST from the bank? How ere they reconciling the payroll to your accounts software?I know a lot of these posts never get resolved so I thought I'd give an update. The bottom line is none of us on the books at my company have had our NEST account setup or had any money paid over in over the last year and the situation is still on-going. Ultimately it is my MDs responsibility to ensure this has happened but on this occasion I feel the 3rd party accountants are more to blame. The MD is more like one of the team members here getting involved in the projects and quoting/sourcing more work, he has no interest in wages or accounts etc. Hence why he subs it out to an accountant, as far as he and our accounts admin girl were concerned they'd told the accountant to set up everybody's pensions and seeing as the money was coming out on the wage slips they seemed to think it was all going fine. Accountant then informed them that although he had setup the NEST account and altered the wages and wage slips, it was up to the MD to enter the employees details onto NEST which he didn't tell anyone at my company. So the accounts girl started to look into it but NEST wouldn't help her as she was not the delegated person on the NEST account, my MD then tried only to find out he was not the delegated person appointed on the NEST account which means they couldn't add employee details...it is in fact the accountant who has appointed himself as the NEST delegated appointed person on the NEST account and therefore it is his responsibility to add the employee details. The situation is still on-going between our accounts girl and the accountant.
MEC said:
Surely the accounts lady and/or MD would realise not payments were going to NEST from the bank? How ere they reconciling the payroll to your accounts software?
The accounts girl did mention to me she feels a bit silly not picking up on it, but she is only admin and that is not her role, I suspect if the system had started and then suddenly payments stopped she would have definitely picked up on that, but the fact the payments were never started and she assumed the accountants were in control of everything it didn't cross her mind, my MD would have assumed the same. I don't know about the payroll software as it's all done out of house.jackofall84 said:
The accounts girl did mention to me she feels a bit silly not picking up on it, but she is only admin and that is not her role, I suspect if the system had started and then suddenly payments stopped she would have definitely picked up on that, but the fact the payments were never started and she assumed the accountants were in control of everything it didn't cross her mind, my MD would have assumed the same. I don't know about the payroll software as it's all done out of house.
Have you had accounts prepared since the pension should have started. If so, I would say it is 100% the accountants issue as they would then see deductions though the payroll but no ongoing payments to NEST? Another point, I would have thought you would have heard from The Pension Regulator. You are obliged to file a certificate of compliance with them within 5 months on your staging date and this would need to include the reference from the NEST scheme.
Automatic £400 fine for not doing this?
Automatic £400 fine for not doing this?
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