Are my AVCs being paid on time?

puk999

Hi.

I'm with a Standard Life pension scheme in work which my employer pays a percentage and I contribute directly from my pay packet too.

When looking on SL's website at the payments made, I notice that the payments are being made a lot later than I had thought. For instance (amount columns removed):

Payment due - 30 Nov 2012 to 30 Nov 2013
Date due	Date paid	Type	Paid by
21 Oct 2013	08 Nov 2013	Regular	Employer
21 Oct 2013	08 Nov 2013	Regular	You
21 Sep 2013	08 Oct 2013	Regular	Employer
21 Sep 2013	08 Oct 2013	Regular	You
21 Aug 2013	05 Sep 2013	Regular	Employer
21 Aug 2013	05 Sep 2013	Regular	You
21 Jul 2013	09 Aug 2013	Regular	Employer
21 Jul 2013	09 Aug 2013	Regular	You
21 Jun 2013	15 Jul 2013	Regular	Employer
21 Jun 2013	15 Jul 2013	Regular	You
21 May 2013	07 Jun 2013	Regular	Employer
21 May 2013	07 Jun 2013	Regular	You
...

My pay day is the 14th of each month, so if we take my pay packet for June as an example, the money was taken from me on the 14th June but not invested into my pension pot until 15th July.

I irks me that my contributions are out of market for a while and also hate the thought of my employer earning any interest on that money! I approached the person in accounts to see if the payments were timely, and the response was that they were within the period allowed by law.

My question is, are the contributions being made on time according to law? The Standard Life plan is called "Group Personal Pension One" if that makes a difference?

Debt_Free_Chick

As you're paid on 14th of each month, the due date is simply 5 working days later (1 week). This is a very tight timescale, given that payroll/accounts will have to compile a file of all the contributions deducted from pay, add on the employer contributions and add on details of joiners & leavers. That said, someone has decided that all this should be possible AND that the payment will have been received by Standard Life within that time. I would have thought that 30th of the month would be more realistic.

The law requires that the contributions deducted from your pay on the 14th of each month must be paid by the 22nd of the following month. So yes, the contributions are being paid within the legal timescales (well before, in most cases).

In practice, you are always going to be a bit out of market, due to the process of compiling the contribution file. I'd also expect that payroll/accounts then have to reconcile that file to check that everything's been included. This is one of the reasons why the legal timescale appears to be long - it's to allow time for these processes & controls to be carried out.

I don't think that your employer is being overly tardy here. Perhaps they could shave a week off their timescales, but it really depends on whether that's actually achievable within the way that payroll & accounts operate. PAYE is due before pension contributions, so I'd imagine that takes precedence - although, PAYE is now more automated with HMRC's Real Time Information requirements.

In summary - yes the contributions are being paid within the law. And in practice, they're being paid quite efficiently.

HTH

puk999

Thank you as I'm very happy to hear confirmation it's legal.