Payments into scheme.

molerat

A quick bit of info please, how quickly does an employer have to pay pension deductions into the group company scheme run by an insurance company ?

Previous payments have been credited on the day due but April's are just being done now.

Debt_Free_Chick

Contributions into money purchase schemes, including personal/stakeholder pension plans have to be paid no later than the 19th day of the month following deduction. So April's contributions should have been paid to the provider no later than 19 May.

You should raise a gentle enquiry e.g. I notice that the contributions for April were only paid to (provider) on (date). I am concerned I may have lost out due to this delay. Could you please explain why the contributions were paid late; what has been done to ensure I have not lost out; and what changes are being made to improve the process to prevent future late payments?

What the company should do is to ask the pension provider to confirm the number of units that would have been bought in your investment fund, if the contributions had been paid "normally" i.e. around the date they're usually paid. They should then look at the number of units bought by the late contribution. If the amount bought is lower, then the company should make an extra contribution to buy the extra units. If you've actually got more units, then you've benefitted by the mistake.

However, get the information first and see how much you have lost out. If the amount is less than, say, £5 would you be happy to ignore the mistake? What if the amount were 50p? Think about what you want to achieve and how far you're prepared to go as sometimes it's not worth it for a tiny amount. But do get reassurance as to the reason for late payment and what's being done to improve the process for the future.

molerat

I am not too worried about the amount. This is a large company so for the whole company it is a very large amount of money. What does this say about the accounting practices or financial state of the company ?

Debt_Free_Chick

molerat wrote: »

I am not too worried about the amount. This is a large company so for the whole company it is a very large amount of money. What does this say about the accounting practices or financial state of the company ?

Probably nothing - more to do with a poor process and a lack of control. But who knows!

Do you not get regular "how are we doing" updates, including finances? Is this a PLC? If so, look at the press releases on the corporate website as these include stockmarket announcements and see what the analysts/rating agencies views are. Google can help to find these or put the company's ticker into FT.com and see what comes up.

I'd be confident it's a process issue though - as someone who manages the process for a company with more than 1,000 employees, it's a right PITA!!!!

molerat

plc with 10500 employees. I am not employed by them anymore so I don't really care but it is an interesting event. Stock market is doing OK.

MikeJones_2

Hi molerat,

In addition to Debt_Free_Chick's answer, if you are interested and want to read up more on this:

- Reporting late payment of contributions to occupational money purchase schemes (The Pensions Regulator)

In particular, see parapraphs 8-16.

For anyone interested there's also:

- Reporting late payment of contributions to personal pensions (The Pensions Regulator)

Note that these are Codes of Practice which whilst may be backed up by specific legislation for certain elements referred to within the Codes, the Codes themselves are not necessarily legally binding.

Hope that helps.

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

Debt_Free_Chick

Just to clarify .... there is only a requirement to report in circumstances that are like to be of "material significance to the Pensions Regulator".

If this is a one-off instance and no-one has lost out, the Regulator won't be interested and as a Pensions Manager, I wouldn't bother reporting it. But that's just IMHO