Employee pension contributions

Kesi

Advise for a friend needed please. He had not noticed that his company had not been taking his works pension contributions over the last year and so no pension payments had been made. He has never opted out.
His company now are saying they will take all of these unpaid payments in one go from his monthly income this coming pay month
which will leave him in financial difficulty. Can they do this and any suggestions on the best way to resolve this issue appreciated.

FatherAbraham

Kesi wrote: »

Advise for a friend needed please. He had not noticed that his company had not been taking his works pension contributions over the last year and so no pension payments had been made. He has never opted out.
His company now are saying they will take all of these unpaid payments in one go from his monthly income this coming pay month
which will leave him in financial difficulty. Can they do this and any suggestions on the best way to resolve this issue appreciated.

In the long run, the employee should seek to build an emergency fund, to deal with large, unexpected expenses.

MK62

I'm not sure of the legalities but I seem to recall that employers cannot make any non statutory pay deductions without the employee's permission......has he/she not asked about just paying the extra over a period rather than all at once?
And don't forget about the employer's contributions either.
There are rules about when minimum pension contributions should be made by.....and employers can be fined for breaches, by the regulator.....perhaps that is the employer's fear.

Kesi

Father A- he is young and as yet not managed to have a safe cash pot sadly.
MK yes he was opted in so they should have taken the payments and apparently because of a takeover looming the company appear as you said to want to get the matter sorted quickly without any consultation.

tacpot12

He should ask whether his employer will give him a loan because he will be in financial hardship. He could consider a third-party loan, but if it has any sort of interest rate, it probably doesn't make financial sense; so he might be limited to family members as a source for such a loan.

He might also ask his employer if it is possible for him to opt out for the period when payments were not made and opt in from this point. It's not a good option, but might be his only option to avoid a month without pay!

Spreadsheetman

If there is a company takeover looming then he can dig his heels in and get the employer to accommodate him. The mistake isn't his fault and he shouldn't be in financial hardship because of it.


The last thing employers want with a company sale is any kind of staff dispute as they have to disclose everything to the buyer.

Thrugelmir

Ask for a salary advance to cover the arrears. This loan is then repaid over the coming months at an agreed rate.

I'm sure the employer would prefer this route to being fined for non compliance. Given it's their responsibility.

Kesi

Thank you for all suggestions given. He is contacting The Pension Advise service and I expect their reply will be similar to yourselves.
I wonder how many other youngsters don't check their pay advises carefully.

squirrelpie

Is this not a situation where the general rule is that a person who has benefitted by a mistake but subsequently taken decisions (i.e. spent the money without realizing) that would now be to his detriment, can be required to repay the excess but this should normally be over the same length of time as the original mistake happened?

In other words the deductions should be taken over a year? As others have said, the employer is the one in a weak position, given the possibility of fines together with the looming takeover possibility, so that's the least he should expect.

Muscle750

And they never noticed on their wage slip in all that time?

kidmugsy

Kesi wrote: »

His company now are saying they will take all of these unpaid payments in one go from his monthly income this coming pay month

The mutton-headedness of some managers is a reliable provoker of dropped jaws.