repaying for contributions employer error

Bussjoh1

My best friend has just been contacted by her HR department to say that it appears that the business has been paying for both employer and employee contributions to her pension for the last 2 years.... its amounting to over £3,000.

What are her rights in terms of paying back? To further complicate the matter she actually leaves this company in a couple of weeks to start a new job - on a lower salary?

Any advice would be great

McKneff

Do you mean that your friend has not been paying at all,
was it not listed on her payslip that she was paying it

You need to be a bit clearer.

Bussjoh1

Sorry for the confusion, she has not paid anything at all - she was supposed to be contributiong 5% and her employer was to pay 5% also - but her HR department are now saying the company has been paying the full 10% since it was put in place two years ago - amounting to over £3,000.

As far as Im aware there has never been any reference on her payslip to any deductions from her salary for a pension.

My questions are really - what happens if she leaves and refuses to pay back and although she hasnt realised it wasnt being deducted is it her employer i.e. payroll where the fault lies or the pension provider?

thanks

McKneff

I really cant see that she hadnt realised that a deduction wasnt being made having had a payslip on every payday for the past 2 years.

Not really sure of the legaliteis of the situation but is anything stopping her from actually paying her part, she is turning down the chance to have all this money paid from her employer into a pension which will be worth a lot in years to come. Its free money after all.

xylophone

It would seem to me that both payroll and your friend are at fault, the former for not setting up the deductions properly and the latter for not querying the absence of the deduction on her monthly payslip.

What have HR said about repayment?

dunstonh

What are her rights in terms of paying back? To further complicate the matter she actually leaves this company in a couple of weeks to start a new job - on a lower salary?

She is not entitled to the money until she pays for it. With errors like this, the firm will typically allow a repayment period (say 12-18 months) to make up the payments.

what happens if she leaves and refuses to pay back and although she hasnt realised it wasnt being deducted is it her employer i.e. payroll where the fault lies or the pension provider?

They will void her pension and she will lose all benefits accrued.

Bussjoh1

Thank you for all the responses, yes she realises her part in this error and is looking at her options at the moment. I believe she has a meeting with the HR manager next week to discuss in full.