Company delaying putting contributions in- is it 'normal practice'?

buel

Hi,
A lot of my co-workers have checked their pension statements and have noticed that some months our employer has not put their contributions or the company's 3% contributions in but two or three months later have doubled them to make up for it.

At present there are two months outstanding. When asked about it, the company's reply was that it is 'standard practice'.
Is this true please?

buel

Anyone please?

RichandJ

Assuming you are in the UK, then it breaches payment regulations and should be reported to the Pensions Regulator if it is persistent.

http://www.thepensionsregulator.gov.uk/search.aspx?client=my_frontend&proxystylesheet=my_frontend&output=xml_no_dtd&oe=UTF-8&ie=UTF-8&site=default_collection&q=contributions

The reason I say 'assuming you are in the UK' is that you've used that ugly Americanism 'co-worker' rather than colleague.

atush

Sounds dodgy to me, I've never seen it before.

And not everything American is ugly, thanks.

RichandJ

atush wrote: »

Sounds dodgy to me, I've never seen it before.

And not everything American is ugly, thanks.

Of course I wasn't referring to you atush or the US in general - I'm typing this on a US invention.

Just don't understand the need to invent such a word when there's already a perfectly good one.

buel

richandj, apologies- i was just unsure how to spell 'colleagues! How embarassing!

Thanks for the replies- it does appear very odd!

dunstonh

Off the top of my head, I seem to recall that the company have something like 19 days within the end of the month of the contribution to place the employer contributions into the pension. I would look it up but I am going out shortly and cant right now.

jamesd

Good practice is what my employer does: payment into the pension scheme on the same day that the rest of the pay is paid. Minimum legal requirement is the money arriving within 19 days of the end of the month. Your employer is clearly and obviously breaking the law.

It is a common illegal practice for firms to delay paying taxes, delay paying pension contributions and delay paying anything else they think they can get away with delaying when they are in serious financial trouble and desperate for cash. Borrowing the pension contributions of the employees without asking them for consent or paying any interest is one of those things.

For a personal pension, including a group personal pension, the law requires that "The employer must pay employee contributions so that the manager receives them within 19 days from the end of the calendar month in which they were deducted from pay." Here's a link to the leaflet describing the rules for employers that you could print and give to them. "The pension provider must receive the employee contributions that you have deducted from employees’ earnings by the 19th day of the month after they were deducted"

For an occupational defined contribution schemes with trustees of a work pension scheme the law is that "Employers must make payments so that the trustees receive ... members' pension contributions within 19 days from the end of the calendar month when they were deducted from pay."

You might also point out to them that mere payment of the missed amount is not sufficient, they are also required to pay in sufficient to cover any investment gains that would have been made if the money had been paid on time, using the actual investments used by the individual employees. They don't get to profit by paying in less if there was a decrease during their illegal delay - they can't speculate on the stock market with employee's money.

You might ask them to explain whether the firm is in such dire financial trouble that it needs to break the law by taking money from employees to get cash.

If the firm is in that degree of financial trouble you could consider buying unemployment insurance in case the situation gets worse, and before you have received any official notification of possible redundancy or bankruptcy.

RichandJ

dunstonh wrote: »

Off the top of my head, I seem to recall that the company have something like 19 days within the end of the month of the contribution to place the employer contributions into the pension. I would look it up but I am going out shortly and cant right now.

"By the 19th of the month following deduction of contributions from salary."

atush

I feel this may be a sign your employer is in trouble.

So while you can and should report them, I might also be making up your CV and looking for a job NOW.

buel

Thank you for the very kind and extremely helpful replies. All very much appreciated!!

I best get on to those comparison sites for some insurance then.....! B**ger!