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

buel

ok, just in case anyone is interested.
The company held a meeting where they admitted that July's payment was made 8 October and August payment will be made on the 10th October.
This information was issued to the relevant employees on paper with the minutes of the meeting.

The MD said that the company could have taken a payment holiday but didn't want to.
Is this true?

atush

Not if they took out employees money?

molerat

A payment holiday is only valid on employer contributions and is usually only for FS schemes. Their contribution for DC schemes is usually contractual and they normally cannot miss any payments. Did they deliver the memo via Wells Fargo / Pony Express ?

buel

I enjoyd that one!! ;o)
They only provided those details after a lot of prompting too!

Please may i ask what DC pension is?
And can we verify that they can't take pension contribution holidays please?

atush

Defined contributions is when you (and your employer) pay into a POT for you. At the end of your working life this pot can be used to buy an income for life.

Defined Benefit is where you and your emploer pay into a general fund that pays you x% of your final or average salary for each your you work there. There is no pot that is yours, just a general pot for everyone. This kind they can take a holiday from but most do not as they hten have to make up those missed years and big companies like BA have got into huge financial trouble from doing this.

Your company cannot take a holiday, and in fact ook your money as well as their money and if they held that too, it is against the law big time.

It sounds to me, like I said before, that given the penalties for these actions and they are still willing to do so means your company is in BIG trouble. Sounds like a Huge financial black hole where their cash flow should be. and could be caused by the Banks not lending?

gadgetmind

buel wrote: »

Please may i ask what DC pension is?

FS = Final Salary.
DB = Defined Benefit
DC = Defined Contribution

Based on what you have said, you are in a defined contribution scheme.

The company are being *very* naughty and are using pensions contributions to settle other bills including payroll. It does sound like they are trying to rectify things, and doing this in an orderly fashion is best for everyone, BUT they must be forced to pull things back into line ASAP and keep it there.

Yes, people can stamp their feet and insist it's all sorted on the dot, but I suspect the company doesn't have the money, and the banks aren't lending, so fixing it fast and keeping it fixed would seem better than the nuclear option.

atush

A lot of companies pay things like rent and tax quarterly, so at the end of Sept they would have had lots of bills to pay and so couldn't pay the pensions on time? Lots of companies like retailers go bust at the end of these quarters as they cann't pay their rents due. So, come the end of Dec/Jan I would expect this to reoccur unless they get some big new orders, or some cash flow via lending?

buel

le_loup wrote: »

Speak to the trustees.

I asked the IFA who is dealing with the company pension 'Who are the trustees of the pension?' and his reply was 'Scottish Widows'.

I thought that there had to be nominated trustees?

Also, i asked him 'This is a defined contributions pension isn't it?' and for some reason he took about 15 seconds to confirm this (i suspect he didn't want to commit himself to the fact that if he admitted that it was a DC pension then the 'contribution holiday' wouldn't apply, since last week he stood next to the MD as the MD claimed that the company could have taken a payment/contribution holiday but simply 'didn't want to')

le_loup

Scottish Widows may be the investment manager, but I doubt that they would be the trustee.
If you are a member of the scheme, you must have paperwork that shows who the trustees are.

buel

I see.
Unfortunately i have onlu just signed up to the scheme so dont have any paperwork as yet. Surely it has to be individuals who are trustees?