Previous Employer stole my pension contributions

KevCan86

Hello all,

I just wanted to see if anyone has experienced similar and if this practice of theirs is reasonable/ legal or what can be done if anything?

 In my first proper job I worked for Zurich Insurance for 2 years  2009 to 2011 and then moved on to bigger and better things. During those 2 years I was a member of their pension scheme and they were making employer contributions during that time.

I had always just assumed that contributions were paid against your National Insurance number and any such payments would be safe as part of your pension pot, so being young and foolish I made no effort to contact them and have my contributions moved over to my new employers scheme. Only when I have changed employer again recently and being a bit older and more concerned about ensuring a good retirement pot did I wonder what happened to that Zurich pension, when I contacted them I got the below response:

 

"When you left service on 19 August 2011, as you had more than 3 months membership but less than 2 years membership, you had the option to transfer the value of your ZCashBuilder Retirement Account to a new pension provider or the ZCashBuilder Retirement Account would be refunded to the Zurich Pension Scheme.

 You were provided with a deadline at the time (6 December 2011) for the transfer to be finalised otherwise your ZCashBuilder Retirement Account would be refunded back to your employer.

 I confirm that as no transfer was finalised, your ZCashBuilder Retirement Account was refunded back to your employer and you no longer have any benefits in the ZCashBuilder Scheme. "

So in other words they basically stole it, claiming they provided me with some deadline to move the pension, a letter/contact I certainly don't recall receiving. 

We aren't talking a life changing amount of money here at least in terms of what was paid in at the time, maybe £1500 max,  however as this was my earliest pension contributions I would have expected this to have grown substantially larger since then had it remained in the pension plan. But even still the thought that employers can just steal money back seems ridiculous so think a minimum i should get the £1500 credited to my new scheme. 

Also surely their claimed method of consent for this isn't fair. Can you really just send someone a letter and if there is no response go ahead steal their money, surely at minimum several letters, a call, a visit from a representative would be necessary. If that's the case I'll just write to my car lease company and say if i don't hear back in 1 week then the car is legally mine and no more payments will be made, thanks. Obviously that is ridiculous but  basically the same thing in my opinion.

What are peoples thoughts, has anyone experienced similar, am I being unreasonable? I just think saving for retirement is hard enough without this sort of shenanigans and skulduggery going on.

lisyloo

No-one has stolen it.
Zurich pensions said they sent it back to your employer (zurich insurance).
Have you been in touch with your employer?

A good thought - Never attribute to malice that which can adequately be explained by incompetance.

ex-pat_scot

It is sadly correct.
You can request that the scheme trustees apply discretion and reinstate your pension. However they have no obligation to do so.
I have a colleague with a similar situation, and due to scheme incompetence was not able to complete the transfer within the timeframe. 
She had to request that the scheme trustees reinstate, which they fortunately did.

The underlying premise does not appear fair, but sadly that was not an unusual arrangement at that time. I understand the practice is no longer permissible.

The company did not steal your money. It merely followed the scheme rules, as it had not received a response to the request letter and as a result followed the process to transfer across.

The scheme rules would have been written with these clauses in place, and i expect they would not have been of immediate concern when you joined.

Albermarle

It seems very unfair  that they did not even refund your own contributions,  assuming you made some ?

Ganga

Albermarle said:

It seems very unfair  that they did not even refund your own contributions,  assuming you made some ?

Reading the original post they were " Employer" contributions so in fact they have stole their own money   

Marcon

KevCan86 said:

Hello all,

I just wanted to see if anyone has experienced similar and if this practice of theirs is reasonable/ legal or what can be done if anything?

 In my first proper job I worked for Zurich Insurance for 2 years  2009 to 2011 and then moved on to bigger and better things. During those 2 years I was a member of their pension scheme and they were making employer contributions during that time.

I had always just assumed that contributions were paid against your National Insurance number and any such payments would be safe as part of your pension pot, so being young and foolish I made no effort to contact them and have my contributions moved over to my new employers scheme. Only when I have changed employer again recently and being a bit older and more concerned about ensuring a good retirement pot did I wonder what happened to that Zurich pension, when I contacted them I got the below response:

 

"When you left service on 19 August 2011, as you had more than 3 months membership but less than 2 years membership, you had the option to transfer the value of your ZCashBuilder Retirement Account to a new pension provider or the ZCashBuilder Retirement Account would be refunded to the Zurich Pension Scheme.

 You were provided with a deadline at the time (6 December 2011) for the transfer to be finalised otherwise your ZCashBuilder Retirement Account would be refunded back to your employer.

 I confirm that as no transfer was finalised, your ZCashBuilder Retirement Account was refunded back to your employer and you no longer have any benefits in the ZCashBuilder Scheme. "

So in other words they basically stole it, claiming they provided me with some deadline to move the pension, a letter/contact I certainly don't recall receiving. 

We aren't talking a life changing amount of money here at least in terms of what was paid in at the time, maybe £1500 max,  however as this was my earliest pension contributions I would have expected this to have grown substantially larger since then had it remained in the pension plan. But even still the thought that employers can just steal money back seems ridiculous so think a minimum i should get the £1500 credited to my new scheme. 

You keep using the word 'steal' when they've done no such thing. You may not recall receiving the letter, but given you were young and doubtless no more interested in pensions than most people in their youth, it is highly likely that it simply hit the waste bin. Your scheme booklet (which won't have provided any more enticing reading) will have set out what would happen if you left within 2 years; probably you didn't read that, either - in keeping with the vast majority of the population.

You were in a non-contributory scheme, so there are no personal contributions to be refunded.  You had less than two years' membership, and didn't take the opportunity to move the pot to a new pension provider (again, very common, especially with people at the start of their career), so the provider correctly returned the contributions to your former employer.

KevCan86 said:

Also surely their claimed method of consent for this isn't fair. Can you really just send someone a letter and if there is no response go ahead steal their money, surely at minimum several letters, a call, a visit from a representative would be necessary. If that's the case I'll just write to my car lease company and say if i don't hear back in 1 week then the car is legally mine and no more payments will be made, thanks. Obviously that is ridiculous but  basically the same thing in my opinion.

What are peoples thoughts, has anyone experienced similar, am I being unreasonable? I just think saving for retirement is hard enough without this sort of shenanigans and skulduggery going on.

Employer and provider have both acted within the law - and indeed your were given the chance to take your employer contributions to a new scheme, had you bothered to check. 

You are being both unreasonable and totally unrealistic. You didn't read any of the literature or information about your scheme and have learned your lesson the hard way.

Ceme3000

Giving you the option of transferring the employer contributions if you leave within 2 years actually strike me as being a rather generous rule of the scheme. Some schemes don't offer this option at all. The employer contributions are automatically returned to the employer. 

It's obviously unfortunate that you don't recall receiving the letter.

nick74

I was in an occupational pension scheme in the 1990s where if you left within two years of joining the scheme the employer could claim all of their contributions back. I hated the job but made sure I stayed two years and one month just so they couldn't! 

KevCan86

Thanks for the responses people and I appreciate your candid answers which I think I needed to hear
to understand I am in the wrong. I still think it was a bit of a shady practice but as you all say they were legally correct. 

Thrugelmir

KevCan86 said:

I still think it was a bit of a shady practice but as you all say they were legally correct. 

Nothing shady. As was totally written in black and white. Not least a 3 month time window in which you could have taken action. 

KevCan86

Thrugelmir said:

KevCan86 said:

I still think it was a bit of a shady practice but as you all say they were legally correct. 

Nothing shady. As was totally written in black and white. Not least a 3 month time window in which you could have taken action. 

Well I agree that they followed their rules and it seems that I didn't read these at the time, which has worked out nicely for them and no doubt will have happened to some other people in my situation netting such employers some nice cash back.

Lesson learned on my part and i'll move on wiser from it, but I will say just because something is written in black and white doesn't make it a good system. I think the way things are now retirement looks bleak enough for some people without having to worry about pension pots disappearing for not reading the fine print or missing a letter. If an employer is offering contributions as part of a benefits package for doing a job and the employee does this job then there shouldn't really be any mechanism in a fair system where an employer can somehow be refunded after the event. That's just my opinion and hopefully the earlier comment someone made about it being a discontinued practice is correct.