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

buel

ok, now it has got a bit more serious and my friends need you help please.

The company claimed that they had made the appropriate payments on Friday the 7th. My friend rang Scottish Widows last friday the 14th and they said that there have been no payments from the employer since June.

My friend rang a number that he thought was the pensions regulator but turned out to be the incorrect department to report the employer and apparently the person gave their opinion that the regulator 'wouldn't be interested' as it wasn't such a big deal (NB- im just repeating what my reliable friend said here) but asvised him to ask for proof of payments from the employer.

Today, my friend asked his manager to get proof of payment for the contributions and was told it may take some time.

Finally, could it take a week for the alleged payments to show?

Please can someone provide the correct number for the regulator as my friend has had enough.

Thank you for your help.

dunstonh

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

That would suggest it is a group personal pension.

Finally, could it take a week for the alleged payments to show?

Yes. clearing cycle and going past the recall point to verify it is paid would take that time.

atush

ASk your 'friend' to produe his paperwork. Details of the trustees will be there.

http://www.thepensionsregulator.gov.uk/

buel

Thank you Dunston H

So does the fact that it is a group personal pension change anything with regards to them claiming they could take a payment holiday? Or that they are more than 19 days late with the payments of the contributions?

And would you say it should take 7 days or even 10 for payments to show?

Finally, when i asked the IFA dealing with this pension on friday if this was a defined contribution scheme, he took 12 seconds of deliberating to answer properly...and finally said 'Yes'. Why would he delay?

dunstonh

Finally, when i asked the IFA dealing with this pension on friday if this was a defined contribution scheme, he took 12 seconds of deliberating to answer properly...and finally said 'Yes'. Why would he delay?

Perhaps if he senses there are problems with the scheme he is thinking of his answers carefully. Or maybe he had to think of what defined contribution meant. Many advisers still refer to them as money purchase rather than defined contribution and he had to think about the definitions before answering. DC does refer to any scheme that is contributions based. However, it is most commonly attributed to COMP/CIMP schemes and not GPPPs. Although it is right to call at GPPP a DC scheme. Basically, its impossible for us to say as we dont know what he was thinking.

So does the fact that it is a group personal pension change anything with regards to them claiming they could take a payment holiday?

Payment holidays dont exist on DC schemes. They either pay in or they dont.

And would you say it should take 7 days or even 10 for payments to show?

If it is paid by direct debit then yes. If its paid by cheque then yes. They may be able to confirm the transaction has been placed earlier than that but if you want a guarantee it has been paid and not bounced, then it is typically 7 days.

The biggest issue here is that they have failed to pay the employee contributions into the pension. I know the missing employer contribution is bad news as well but effectively they have taken money off the employees and kept it for themselves. Some may perceive that as fraud/theft.

Not paying the employers contribution is often a sign of a company in trouble. Not paying the employees contribution is theft and can indicate the company is in even worse trouble if its not a rogue employee.

atush

AS I said many posts back, I hope your CV is up to Date and you are actively looking. It really sounds to me, from all that has been said, your company is in big trouble to be acting in the way as they are breaking the law- something companies don't do unless their backs are against the wall. And most would not commit fraud or theft even if they were, they would just close the doors or call in admisitrators.

buel

Thank you Atush, yes i took your advice and am looking.

Just one more thing that strikes me as odd- The employer has missed paying pension contributions, haven't paid their protective clothing bill and haven't paid the bill for the steel that we use and yet are taking on two new shop floor workers??

I do know that employees have to work a month 'in hand' so that's two months before they have to actually pay them......

atush

Like I said in post 28, they have severe cash flow problems if they are behind in bills and pensions. But the Bills thing would be more normal than the pensions one as paying bills late isn't exactly illegal.

As to taking on workers, let us hope for their sake they have new orders coming on stream to pay for them as it doesn't look good from what i can see.

buel

Thank you for that.

Just for a bit of humour, i thought id give you all an update-
My friend asked his manager to ask the MD for proof of payment of the contributions (that he himself had promised was paid in on the 7th October) and the MD has refused and said 'My word should be enough'!!!(even though he lied previously to them all by claiming that the company could have taken a payment holiday)

Then when my friend complained to his manager that even if the funds are replaced, they should still add whatever(if any) profit would have been made on them too. The manager's reply was 'Oh well it's luck of the draw'!
Shocking!

One more point- Shouldn't Scottish Widows, as trustees, have reported this?

gadgetmind

I also have a group person pension. The company pays in the money towards the end of the month, and as I monitor my pension online, I can see this going in. The one time it was late (8 days), I fired off an email and it was discovered that the payment should have been done automatically, but this had failed, and a key person was away so it hadn't been spotted. The payment was made two days later and an apology sent out to everyone in the company.

Compare and contrast.