Workplace Pension - or lack of one

[Jos Notstoppen]

Some help and advise needed

I have learnt today that my company have not enrolled me in a workplace pension. I have been there just over 3 years.

It is a small company. I joined for a easy job before I retire, I am 65 now. Since day one money has been deducted from my salary for a pension, I was lead to believe the pension was with NEST. Note only 3% was deducted.

The last few weeks I have been asking about this pension, the boss has evasive when questioned, seems he thought it all arranged by his accountant, who it turns "forgot" to start one. I suspect my boss started to realise something was wrong a month or so ago as a new starter was also not enrolled.

At the moment we are unsure where the money actually is being held or if it has been spent.

My boss has offered to set up a new pension with the money plus 6% to allow for growth.


Any suggestions what I can do ?
Just accept his offer I expect

[dave123456]

I’d suggest it’s not hard to get a few examples of how much that money has grown in three years and model it. If he’s saying the whole amount at 6% that’s probably not a terrible deal but you may want to negotiate with him on that.

5% compounded up 3 years is about 16% but in reality the earlier period would be at a small investment.

[Simpo Two]

dave123456 said:

I’d suggest it’s not hard to get a few examples of how much that money has grown in three years and model it.

That seems entirely reasonable 'to put you in the position you would have been'. My aim might be to get that as a lump sum, to make up for what you've lost by not being invested, and then 3% from now on.

The only question then is which index to use for the calculation. Perhaps find out what the pension is normally invested in and use that.

[Jos Notstoppen]

Thanks,

We are not talking huge amounts here, think about 5 - 6000 total

If for any reason he does not pay into another fund, is there any way I can claim the money back from somewhere ?

[Puzzles]

Nest have a portal, the boss/accountant needs to submit the payroll data either directly or with software.

IIRC, they should get a notification and direct debit taken each month. So it shouldn’t be difficult to see if the money has been sent.

[Simpo Two]

Jos Notstoppen said:

Thanks,

We are not talking huge amounts here, think about 5 - 6000 total

If for any reason he does not pay into another fund, is there any way I can claim the money back from somewhere ?

This could be the place to go: https://www.pensions-ombudsman.org.uk/
But I may be wrong so check first!

[Craikeybaby]

To be fair 6% is probably better than you would have made with Nest...

[Mogul]

The Nest Sharia pension fund has done pretty well…

https://www.trustnet.com/factsheets/P/klls/nest-sh...

[Rufus Stone]

This should be reported to The Pensions Regulator. It is a serious offence.

[UpTheIron]

It's not just a missing 3% though is it?

Minimum contribution rules (since April 2019) are 5% employer and 3% employee of qualifying earnings IIRC.

Edited by UpTheIron on Wednesday 26th February 09:02

[Quattr04.]

Yes don’t forget the employer contributions

My work did this to my friend who had opted out for some reason and then was paying into a private pension after tax? (That’s another matter)

But 3 years ago he re enrolled but the company never sorted it


They have now paid all the money they should have done into his pension pot, and are allowing him to backdate the payments over 2 years

He’s still missed out on 3 years growth of 14% contributions though! (On about 45k!)

So he must be well out of pocket

[alscar]

Can’t be too difficult for the pension scheme that would have been utilised to advise what the capital growth would have been over the 3 years and then for the company to effectively put in that sum now and going forward keep to what they should have been putting in. Obviously a chance that the scheme is as poor as the accountants to do list and if it hasn’t grown per annum more than 6% for growth perhaps take the boss’s remedial figure.
In isolation 6% / 2% pa doesn’t sound very good.
Fwiw when financial institutions make an “error” they all seem to use an 8% interest figure per annum as the default “ compensation “.

[_Hoppers]

I've had a Nest pension for nearly 6 years and switched to the Sharia Law fund shortly after commencement. My investment has almost doubled, compared to this, 6% sounds a bit mean?!

[ferret50]

There is also the small matter of 25% tax uplift from Rachel in accounts.

[The Leaper]

Jos Notstoppen said:

Some help and advise needed

I have learnt today that my company have not enrolled me in a workplace pension. I have been there just over 3 years.

It is a small company. I joined for a easy job before I retire, I am 65 now. Since day one money has been deducted from my salary for a pension, I was lead to believe the pension was with NEST. Note only 3% was deducted.

The last few weeks I have been asking about this pension, the boss has evasive when questioned, seems he thought it all arranged by his accountant, who it turns "forgot" to start one. I suspect my boss started to realise something was wrong a month or so ago as a new starter was also not enrolled.

At the moment we are unsure where the money actually is being held or if it has been spent.

My boss has offered to set up a new pension with the money plus 6% to allow for growth.


Any suggestions what I can do ?
Just accept his offer I expect

Your employer has failed to meet its legal responsibilities to provide a workplace pension. This should be reported to The Pensions Regulator.

You can also raise a formal complaint against your employer and if they do not resolve your complaint to your satisfaction you can ask the Pensions Ombudsman's office to investigate it (you must have raised a complaint first with your employer). The PO has legal powers, so if he makes a determination against you employer in your favour his decision is legally enforceable. BTW, I have been a volunteer at the PO's office for 30+ years dealing with all kinds of pension complaints and, unfortunately, your type is not uncommon.

R.

[TwigtheWonderkid]

The Leaper said:

Your employer has failed to meet its legal responsibilities to provide a workplace pension. This should be reported to The Pensions Regulator.

You can also raise a formal complaint against your employer and if they do not resolve your complaint to your satisfaction you can ask the Pensions Ombudsman's office to investigate it (you must have raised a complaint first with your employer). The PO has legal powers, so if he makes a determination against you employer in your favour his decision is legally enforceable. BTW, I have been a volunteer at the PO's office for 30+ years dealing with all kinds of pension complaints and, unfortunately, your type is not uncommon.

R.

He could do, but if the employer realises they've messed up and wants to work with the OP to find an agreeable solution, why would you?

[lauda]

This sounds like a complete bugger's muddle to me.

Under the requirements of autoenrollment, you should have been enrolled in a pension scheme and paid 5% employee contributions with a minimum of 3% from your employer. It sounds like your employer has deducted the employer % from your pay, rather than the 5%, although it may be that it's actually 5% of eligible earnings that happens to work out as 3% of gross pay.

So there's a possibility you've paid the right amount or that they've screwed that up as well.

I would be asking your employer to set our very clearly the value of employee and employer contributions they should have paid into your pension since you started your employment and then apply a reasonable rate of return to that for the relevant period. They should then make good on the full amount.

If they don't, I'd be making the Pensions Ombudsman my first port of call.

[alscar]

The Leaper said:

Your employer has failed to meet its legal responsibilities to provide a workplace pension. This should be reported to The Pensions Regulator.

You can also raise a formal complaint against your employer and if they do not resolve your complaint to your satisfaction you can ask the Pensions Ombudsman's office to investigate it (you must have raised a complaint first with your employer). The PO has legal powers, so if he makes a determination against you employer in your favour his decision is legally enforceable. BTW, I have been a volunteer at the PO's office for 30+ years dealing with all kinds of pension complaints and, unfortunately, your type is not uncommon.

R.

Understand your comments but presumably if followed might not do the OP a great deal for a happy relationship within the workplace environment.
Perhaps better to include your comments as part of the OP’s negotiation tactics ie ….but I don’t want to do that !

[The Leaper]

alscar said:

Understand your comments but presumably if followed might not do the OP a great deal for a happy relationship within the workplace environment.
Perhaps better to include your comments as part of the OP’s negotiation tactics ie ….but I don’t want to do that !

Thanks, alscar.

The Pensions Ombudsman's office has seen many complaints that are about

a. small employers, and

b. failure to set up a workplace pension or failure to pay employee and employer contributions into an established workplace pension.

Too many such employers simply do not meet their legal obligation. The PO has made many determinations about these types of complaint in favour of the complainant. This invariably covers:

• the requirement to pay any outstanding employee and employer contributions in to the workplace pension;
• to have a calculation done of the lost investment by the non payment of contributions, and for the employer to make a payment to restore that loss;
• for the employer to make a payment to the employee for redress for non financial injustice, typically £1000.

The PO also sets the timescale for this to be completed. As I said in an earlier post, the PO has legal powers so determinations are to be followed and are enforceable.

I take your point about the relationship between employee and employer, but that is no reason for the situation to continue and for the employer to escape responsibilities. In many cases investigated by the PO the employer has deducted contributions from an employee's pay and kept that money in their business, something called unjust enrichment. Of course, a sensible and informal discussion with the employer leading to recognition of responsibilities and the full and correct resolution of the issues is the best and most effective way of getting this all sorted.

R.

[Nick Forest]

There’s also the tax and NI elements under salary sacrifice arrangements to factor in as part of the overall sum