Workplace Pension: Increasing Employee Contributions Issue

LXdaddy

Best you can expect is to be able to increase your contributions for the next few months to take what you should have put in over the last 12 months.
You have lost out on potential growth and potential loss but it's not as if they deducted the money from your salary and failed to put it in your pension.

WobblyDog

As it's a salary sacrifice scheme, are there any limits on when you can alter your contributions, which might have complicated matters, and compounded a simple clerical error? The salary sacrifice scheme I'm in only allows contributions to be changed once a year, except in the case of major life changes. I don't think I'd make an issue of it if it were me, but I'd watch out for other HR errors in future.

MEM62

DJB90 wrote: »

I've missed out on 12 months of increased contributions due to their reluctance to resolve my query. Would this not class as a loss?

Of course not! You have no loss.

You have the money that was not paid into your pension. You can pay that into your pension as a one-off payment. Your pension fund will then be at the level you wanted.

You don't get them to fund your pension with the years' missing increase just because they made an error.

thelem

Where do you think you have lost money? If they haven't increased your employee contributions then you will have received that money in your bank account instead, so there is no loss. You can't expect them to pay you the same money twice - once as salary, once as pension.

Does your employer normally match your increased contributions? If so, you could make an additional contribution using the extra pay you have received over the last 12 months and ask them to match it as they would have done if they had processed your request promptly.

EdSwippet

thelem wrote: »

Where do you think you have lost money?

Missing out on market gains over the past year, perhaps?

Yes, the post-tax money could instead have been placed into the same investments outside of a pension. And yes, if contributing in bulk now a chunk of ground can be made up. But even there, the delay in receiving any employer match, salary sacrifice uplift, tax relief and so on, and the missed growth on these, still suggests that a net loss is possible. And perhaps likely.

atush

MEM62 wrote: »

Of course not! You have no loss.

You have the money that was not paid into your pension. You can pay that into your pension as a one-off payment. Your pension fund will then be at the level you wanted.

You don't get them to fund your pension with the years' missing increase just because they made an error.

There is a loss as it was salary sacrifice. If he pays now a LS from taxed income, he will lose the SS Nics.

Malthusian

EdSwippet wrote: »

Missing out on market gains over the past year, perhaps?

If the market had gone down over the past year would the OP be paying compensation to the employer to put them in the position they should have been - i.e. poorer?

It is very annoying and if it was a financial services provider that had screwed up I would be taking them all the way to the Ombudsman until they put me in the position I should have been had they collected the contributions correctly. However as it is not a regulated financial services company but the OP's employer, they are not subject to the Ombudsman, and if the OP wants to get compensation they will have to sue them and accept that they will lose their job.

As long as the employer is now arranging to collect the outstanding contributions, and pay the correct employer contributions / NI saving, the loss is the difference between what the pension would have been worth had the contributions gone in monthly as intended instead of all at once now. The OP has not missed out on a whole year's growth, because he wasn't asking to invest a lump sum a year ago, he was trying to set up an increase to monthly contributions (I assume), so he has missed out on 12 months' growth on the July 2016 payment, 11 months' growth on the August 2016 payment, 10 months' on September 2016 and so on.

Which means that all things considered it is probably not worth risking his job over.

EdSwippet

Malthusian wrote: »

If the market had gone down over the past year would the OP be paying compensation to the employer to put them in the position they should have been - i.e. poorer?

Well, no. But it didn't. It went up. The OP asked their employer to increase pension contributions, which the employer didn't do. This is a probable loss over what would have happened had their employer acted as requested.

A delay of 12 months does suggest that the OP didn't keep on top of things as assiduously as they should have, though.

Malthusian wrote: »

Which means that all things considered it is probably not worth risking his job over.

If that's going to be the end result, then of course not.

However, pushing one's employer a bit to see if you can negotiate some amicable redress might be feasible. Especially if they have admitted fault. A lot hinges on the details, how much communication between the two over the year, how valuable an employee you are, etc. And to make a strong case one would have to calculate the missed gains carefully and accurately, not too hard with a decent spreadsheet.

Personally, I'd probably be a bit reluctant to let this go. But then, I wouldn't have let it sit for 12 months without making some fuss either.