Collection of Contributions by a Third Party

pennyaashton

My husband chose not to sign up to his company's pension with Scottish Widows as he only had 12 months before retirement however, his employer took 2 months contributions in July and August. They paid one back but not the other. When he asked repeatedly for this amount to be refunded, they said that it had gone to an interim company and they are trying to get it back for him. 
My question is: is it normal practice for a 'middleman' to collect pension contributions?

Dazed_and_C0nfused

More to the point why has he chosen to take an effective pay cut and at the same time possibly pay more tax than he needs to?

dunstonh

My husband chose not to sign up to his company's pension with Scottish Widows as he only had 12 months before retirement however, his employer took 2 months contributions in July and August.

Why did he feel that free money wasn't worth having?   There is no logic in the reason not to join.  

When he asked repeatedly for this amount to be refunded, they said that it had gone to an interim company and they are trying to get it back for him. 
My question is: is it normal practice for a 'middleman' to collect pension contributions?

The employer takes it from the pay via payroll.    There may be a payroll company in there where the employer pays the payroll company and the payroll company pays the staff and handles the tax and distributions.   The pension company will refund to the payer who will then refund to the employer.

pennyaashton

We lost my income when I was forced to give up work at 54 due to ill health (cancer) I had a good salary so it was a blow - we can just about pay our living costs and mortgage so decided we couldn't afford to pay for the pension unfortunately. 
Payroll is an integral part of the company, not a separate company so it's a mystery.
We could do with this money in our bank!

Alexland

pennyaashton said:

Payroll is an integral part of the company, not a separate company so it's a mystery.

It could just be that the first payment has gone to the pension provider and the second was stopped from leaving the employer. The matched employer contributions (free money) and likely tax benefits really do make it worth doing everything possible to take up the generous offer of joining the pension.

Albermarle

pennyaashton said:

We lost my income when I was forced to give up work at 54 due to ill health (cancer) I had a good salary so it was a blow - we can just about pay our living costs and mortgage so decided we couldn't afford to pay for the pension unfortunately. 
Payroll is an integral part of the company, not a separate company so it's a mystery.
We could do with this money in our bank!

If you had contributed for 12 months you probably would have doubled your money .

dunstonh

Payroll is an integral part of the company, not a separate company so it's a mystery.

Are you sure?  National companies may well have their own department but small to medium sized companies frequently use companies behind the scenes and the employee would never know.  The reference to a third party suggests there is a company handling it for them.   If they are not using a third party then who is this interim company that has the money?

pennyaashton

Definitely part of the company, its a large British/European organisation and my husband has spoken to the Finance/Payroll manager who assured him he would be refunded in August - still waiting for the refund. My thoughts exactly .. where is the money? It is only about £150 but the principal is important. I am trying to get everything 'squared off'  so my husband does not have financial concerns to battle with.

squirrelpie

Penny, I would suggest approaching a financial helpline in a Sunday newspaper. They seem to be able to resolve things quickly. There may be some official organization you could complain to as well - I'm surprised nobody has suggested anything so far.

It seems to me that the point is he asked not to be signed up; it was against his wishes and now this large organisation ought to make things good PDQ out of their own pockets and sort out the details without involving you.

dunstonh

It seems to me that the point is he asked not to be signed up; it was against his wishes and now this large organisation ought to make things good PDQ out of their own pockets and sort out the details without involving you.

With AE you are opted in and you then have to opt out.   So, the issue is not that we was signed up when he didn't want to be.  That he had no choice on.   It is that the opting out hasn't been completed correctly. 

where is the money? It is only about £150 

And how much free money is he losing by doing this?  (£150 suggests the potential for £100 or more being thrown away each month)