Delay in pension contributions being credited
Discussion
Hi Folks
I was having a look at my workplace pension account and spotted that generally my contributions are not being credited to my pension account until at least three weeks after payday sometimes it is even longer.
I was wondering if this is the norm as it feels a bit unfair that I am potentially losing growth each month.
I have asked our HR department and been told its normal.....
I was having a look at my workplace pension account and spotted that generally my contributions are not being credited to my pension account until at least three weeks after payday sometimes it is even longer.
I was wondering if this is the norm as it feels a bit unfair that I am potentially losing growth each month.
I have asked our HR department and been told its normal.....
MK1RS Bruce said:
Is the 21st of the following month a legal requirement?
Surely there is a considerable upside to large companies in terms of interest from holding onto employees money for the best part of 4 weeks?
It s swings and roundabouts. There could be considerable upside if the delay results in you buying when the market is down. Surely there is a considerable upside to large companies in terms of interest from holding onto employees money for the best part of 4 weeks?
Over the life of a pension scheme the delay makes zero difference.
Edited by craig1912 on Tuesday 4th November 09:55
Does look a bit sharp practice ( and pathetic for a solvent business ) . I just checked, my last employer ( I refired early ) paid their and my contribution mid week the next week after the end of months last Friday ...... in other words a few days.
That was an employer with about 6,000 UK employee payrole. A global company with about 80K world staff , they certainly had their faults but F%$^ing around with stuff like this, HR , tax, employee support etc was definitely not one of the complaints.
That was an employer with about 6,000 UK employee payrole. A global company with about 80K world staff , they certainly had their faults but F%$^ing around with stuff like this, HR , tax, employee support etc was definitely not one of the complaints.
MK1RS Bruce said:
Hi Folks
I was having a look at my workplace pension account and spotted that generally my contributions are not being credited to my pension account until at least three weeks after payday sometimes it is even longer.
I was wondering if this is the norm as it feels a bit unfair that I am potentially losing growth each month.
I have asked our HR department and been told its normal.....
Are you sure they're not taken by direct debit?I was having a look at my workplace pension account and spotted that generally my contributions are not being credited to my pension account until at least three weeks after payday sometimes it is even longer.
I was wondering if this is the norm as it feels a bit unfair that I am potentially losing growth each month.
I have asked our HR department and been told its normal.....
For our stakeholder scheme once monthly payroll is finalised we have to do a bunch of reconciliations. We then submit a return to the Pension provider and they take the money out of our account via DD.
As I mentioned on the other thread - there are a lot of recs to do at month end (Tax, NI, pensions, student loans, salary advances, car loans, gym loans, salary sacrifice schemes etc) so it can take time to sort out.
Withing a day or so of being paid Aviva know how much my contribution is as it updates the amount of my last payment. I assume thats when they get the money. Its then 2-3 weeks before it gets actually added to my pension so mine seems to be an Aviva issue rather than my company not sending it.
craig1912 said:
MK1RS Bruce said:
Is the 21st of the following month a legal requirement?
Surely there is a considerable upside to large companies in terms of interest from holding onto employees money for the best part of 4 weeks?
It s swings and roundabouts. There could be considerable upside if the delay results in you buying when the market is down. Surely there is a considerable upside to large companies in terms of interest from holding onto employees money for the best part of 4 weeks?
Over the life of a pension scheme the delay makes zero difference.
Edited by craig1912 on Tuesday 4th November 09:55
MK1RS Bruce said:
I would debate this as with a managed plan their intention is to continually grow the pot, therefore any time when your money is not in the market its not earning money, there might be ups and downs of fund etc but the general trend is always up.
There are a many many periods over the years where there is negative growth. Of course the intention is to grow the pot but that can’t happen “continually”. Your money being “in the market” may well mean it is losing money.Don’t worry about short term stuff, a short delay in investing money is neither here nor there and as I said may benefit you if funds bought when the market is down.
Its funny because i have often thought this , when the market goes through a torrid time (e.g Trumps tarrif antics ) the pension is never paid during those down days. The money is always credited when the market is at its peak ! very frustrating , however i understand how in the long run it makes no difference.
craig1912 said:
There are a many many periods over the years where there is negative growth. Of course the intention is to grow the pot but that can t happen continually . Your money being in the market may well mean it is losing money.
Don t worry about short term stuff, a short delay in investing money is neither here nor there and as I said may benefit you if funds bought when the market is down.
Sorry but that's ridiculous.Don t worry about short term stuff, a short delay in investing money is neither here nor there and as I said may benefit you if funds bought when the market is down.
You have to look at the average return. I started the other thread on this, my pension contribution still hasn't been paid from my end of September wages, I've probably lost £100 (salary sacrificing) just this month and someone else is getting that return on my money.
MK1RS Bruce said:
Is the 21st of the following month a legal requirement?
Yes. The first bit of the part (b) blurb essentially means "by cheque".the law said:
Prescribed time in which an employer must make payments to trustees or managers") of the Occupational Pension Schemes (Scheme Administration) Regulations 1996 (SI 1996/1715
16. (1) For the purposes of section 49(8) of the 1995 Act (amount deducted from member’s pay) the “prescribed period”, in relation to an amount deducted from a member’s pay and payable to the trustees or managers of a scheme, is the period beginning with—
(a) the last day of the pay period in which the amount was deducted; and
(b) ending with the 19th day of the next month, where the payment is not made by means of electronic communication; or with the 22nd day of the next month, where the payment is made by means of electronic communication.
...
This version reflects amendments to Regulation 16 made under the Automatic Enrolment (Miscellaneous Amendments) Regulations 2013.
16. (1) For the purposes of section 49(8) of the 1995 Act (amount deducted from member’s pay) the “prescribed period”, in relation to an amount deducted from a member’s pay and payable to the trustees or managers of a scheme, is the period beginning with—
(a) the last day of the pay period in which the amount was deducted; and
(b) ending with the 19th day of the next month, where the payment is not made by means of electronic communication; or with the 22nd day of the next month, where the payment is made by means of electronic communication.
...
This version reflects amendments to Regulation 16 made under the Automatic Enrolment (Miscellaneous Amendments) Regulations 2013.
Peterpetrole said:
Sorry but that's ridiculous.
You have to look at the average return. I started the other thread on this, my pension contribution still hasn't been paid from my end of September wages, I've probably lost £100 (salary sacrificing) just this month and someone else is getting that return on my money.
It isnt ridiculous. Yes yourminey should be paid over in a timely fashion and if you feel that strongly, complain about it but, in the overall timeframe a few weeks makes no difference to your personal pension and as I said in a declining market it is to your advantage (unless your pension isnt invested in equity funds).You have to look at the average return. I started the other thread on this, my pension contribution still hasn't been paid from my end of September wages, I've probably lost £100 (salary sacrificing) just this month and someone else is getting that return on my money.
craig1912 said:
It isnt ridiculous. Yes yourminey should be paid over in a timely fashion and if you feel that strongly, complain about it but, in the overall timeframe a few weeks makes no difference to your personal pension and as I said in a declining market it is to your advantage (unless your pension isnt invested in equity funds).
It's a few weeks, EVERY month. In other words minimum 10% of the investment return per annum I would get if the money was credited on time. And it's not a declining market, obviously.
Peterpetrole said:
craig1912 said:
It isnt ridiculous. Yes yourminey should be paid over in a timely fashion and if you feel that strongly, complain about it but, in the overall timeframe a few weeks makes no difference to your personal pension and as I said in a declining market it is to your advantage (unless your pension isnt invested in equity funds).
It's a few weeks, EVERY month. In other words minimum 10% of the investment return per annum I would get if the money was credited on time. And it's not a declining market, obviously.
lauda said:
Peterpetrole said:
craig1912 said:
It isnt ridiculous. Yes yourminey should be paid over in a timely fashion and if you feel that strongly, complain about it but, in the overall timeframe a few weeks makes no difference to your personal pension and as I said in a declining market it is to your advantage (unless your pension isnt invested in equity funds).
It's a few weeks, EVERY month. In other words minimum 10% of the investment return per annum I would get if the money was credited on time. And it's not a declining market, obviously.
So if your pension fund goes up by £100,000 over ten years, you will have LOST 0.058*£100,000 equals £5,800. It's compound interest.
That £5800 has gone to your employer, and/or to your pension provider.
I can't express it any more clearly than that.
Peterpetrole said:
lauda said:
Peterpetrole said:
craig1912 said:
It isnt ridiculous. Yes yourminey should be paid over in a timely fashion and if you feel that strongly, complain about it but, in the overall timeframe a few weeks makes no difference to your personal pension and as I said in a declining market it is to your advantage (unless your pension isnt invested in equity funds).
It's a few weeks, EVERY month. In other words minimum 10% of the investment return per annum I would get if the money was credited on time. And it's not a declining market, obviously.
So if your pension fund goes up by £100,000 over ten years, you will have LOST 0.058*£100,000 equals £5,800. It's compound interest.
That £5800 has gone to your employer, and/or to your pension provider.
I can't express it any more clearly than that.
Unless your only investment is in cash and your only return is interest, your example is nonsense.
Assuming it's not all in cash, my original point stands.
lauda said:
Peterpetrole said:
lauda said:
Peterpetrole said:
craig1912 said:
It isnt ridiculous. Yes yourminey should be paid over in a timely fashion and if you feel that strongly, complain about it but, in the overall timeframe a few weeks makes no difference to your personal pension and as I said in a declining market it is to your advantage (unless your pension isnt invested in equity funds).
It's a few weeks, EVERY month. In other words minimum 10% of the investment return per annum I would get if the money was credited on time. And it's not a declining market, obviously.
So if your pension fund goes up by £100,000 over ten years, you will have LOST 0.058*£100,000 equals £5,800. It's compound interest.
That £5800 has gone to your employer, and/or to your pension provider.
I can't express it any more clearly than that.
Unless your only investment is in cash and your only return is interest, your example is nonsense.
Assuming it's not all in cash, my original point stands.
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