My employer is taking the wrong deductions

IMC2

I recently had a promotion in work which included and increase in pensionable pay.

Due to the a series of admin errors, my pensionable pay did not raise in line with my new salary. (Around £18,000 short)

I have been trying to get this fixed for also most a year, but usually get a response down the line of 'the computer says X, while you are saying Y. The computer is right, you are wrong'.

There has finally been a bit of break through where the mistake has now been recognised. But, the contributions have not yet been fixed.

I want my missing contributions to be backdated to the applicable date. However, I am unsure if I will be responsible for back paying my contributions.

Different colleagues are telling me different things. One argument is that since I highlighted the mistake 3 times and the relevant departments never investigated my issue, the company should pay. The other argument is I'll have to back pay my contributions and the company will back pay theirs. 

Has anyone else ever came across or been involved in a similar situation. Where you were underpaying into your pension, you highlighted it, your company confirmed the contributions where correct, then realised later down the line that the contributions were indeed wrong?

Any help and advise would be appreciated.

Thank you

Marcon

IMC2 said:

I recently had a promotion in work which included and increase in pensionable pay.

Due to the a series of admin errors, my pensionable pay did not raise in line with my new salary. (Around £18,000 short)

I have been trying to get this fixed for also most a year, but usually get a response down the line of 'the computer says X, while you are saying Y. The computer is right, you are wrong'.

There has finally been a bit of break through where the mistake has now been recognised. But, the contributions have not yet been fixed.

I want my missing contributions to be backdated to the applicable date. However, I am unsure if I will be responsible for back paying my contributions.

Different colleagues are telling me different things. One argument is that since I highlighted the mistake 3 times and the relevant departments never investigated my issue, the company should pay. The other argument is I'll have to back pay my contributions and the company will back pay theirs. 

Has anyone else ever came across or been involved in a similar situation. Where you were underpaying into your pension, you highlighted it, your company confirmed the contributions where correct, then realised later down the line that the contributions were indeed wrong?

Any help and advise would be appreciated.

Thank you

Colleagues usually mean well but are often wrong!

You can't usually have your cake and eat it - if you want employer contributions based on your increased salary, then you have to accept you need to pay increased personal contributions. 

You also need to check how the delay in payment has impacted on the value of your pension, assuming it's a defined contribution scheme. The provider should be able to give you figures to confirm what today's value would be had contributions been made at the correct time. The good news(!) is that you get the better of what the fund is actually worth v 'what it would have been if....'

penners324

Are you paid above £50,270?

Does your company use Qualifying Earnings? This would explain why pension contributions haven't gone up.

Qualifying Earnings are for salary between £6k (ish) and £50,270. Any salary above that doesn't get a contribution.

IMC2

penners324 said:

Are you paid above £50,270?

Does your company use Qualifying Earnings? This would explain why pension contributions haven't gone up.

Qualifying Earnings are for salary between £6k (ish) and £50,270. Any salary above that doesn't get a contribution.

Current pensionable salary is around £25k, should be around the £45k mark. My actual base salary is between £45k and £50k. Overtime etc can take my annual salary a lot higher but pensionable pay is purely based off base salary. So any bonuses, overtime and other add ons won't be used to work out contributions.

To put it simply they've raised the base salary but not the pensionable salary. Other employees who have had the same promotion have never had this issue. 

IMC2

Marcon said:

IMC2 said:

I recently had a promotion in work which included and increase in pensionable pay.

Due to the a series of admin errors, my pensionable pay did not raise in line with my new salary. (Around £18,000 short)

I have been trying to get this fixed for also most a year, but usually get a response down the line of 'the computer says X, while you are saying Y. The computer is right, you are wrong'.

There has finally been a bit of break through where the mistake has now been recognised. But, the contributions have not yet been fixed.

I want my missing contributions to be backdated to the applicable date. However, I am unsure if I will be responsible for back paying my contributions.

Different colleagues are telling me different things. One argument is that since I highlighted the mistake 3 times and the relevant departments never investigated my issue, the company should pay. The other argument is I'll have to back pay my contributions and the company will back pay theirs. 

Has anyone else ever came across or been involved in a similar situation. Where you were underpaying into your pension, you highlighted it, your company confirmed the contributions where correct, then realised later down the line that the contributions were indeed wrong?

Any help and advise would be appreciated.

Thank you

Colleagues usually mean well but are often wrong!

You can't usually have your cake and eat it - if you want employer contributions based on your increased salary, then you have to accept you need to pay increased personal contributions. 

You also need to check how the delay in payment has impacted on the value of your pension, assuming it's a defined contribution scheme. The provider should be able to give you figures to confirm what today's value would be had contributions been made at the correct time. The good news(!) is that you get the better of what the fund is actually worth v 'what it would have been if....'

The pensionable salary should have increased wither I wanted it to or not. All I can change is the percentage I'm willing to pay. As it stands £25,000ish is pensionable of which I contribute 5%. It should be around 5% of £45,000ish.

I have no issue paying the extra money going forward. However, I want the missing money (The difference to what I should have been pay) back dated, basically so everything is as it should be.

Someone had input the wrong figures into a computer when I was promoted and I've been telling them months. They've now finally realised the mistake. 

All I want to know is if I have a leg to stand on when I say they should pay my missing contributions from previous year (not going forward). As it was their mistake, and I highlighted it to them, multiple times.

The colleague who reckons the company should pay basically said, all money payed to an employee is to be considered spent and can only be taken back if there has been an over payment. As my gross monthly pay has always been correct, there hasn't been an over payment. Payroll made the mistake. Plus the added fact I've told them 4 maybe 5 times now, should go in my favour as I've tried to correct this so many times. 

BoGoF

If you knew the deductions were wrong and were hoping it would be backdated at some point you will have put the money you should have been paying aside for when that day would come no?

Everything as it should be you say, well the 'should be' position is you wouldn't have had the extra money in the first place.

Your colleague is talking nonsence, things get backdated all the time.

IMC2

BoGoF said:

If you knew the deductions were wrong and were hoping it would be backdated at some point you will have put the money you should have been paying aside for when that day would come no?

Everything as it should be you say, well the 'should be' position is you wouldn't have had the extra money in the first place.

Your colleague is talking nonsence, things get backdated all the time.

Yes, I've got enough to cover it, although I'd imagine a payment plan would probably be the option they would propose.

I'll probably ask them to back date it and argue the toss. Management, the union, HR, etc haven't seen a situation like this before. Obviously the union will say the company should pay for their mistake and management will say I should pay as its my pension, regardless of the mistake being the companies and the repeated emails from me asking for it to be corrected.

But everywhere I've looked for advise there doesn't really seems to be much information. More advise on over payments rather than underpayments.

Southend_2

They should correct the situation and put you back in the position you would have been in if the error hadn't occurred. As for getting the company to pay your contributions for the period of the error, you don't have a leg to stand on. You may be lucky enough to get an apology for the mistake though. 

QrizB

Southend_2 said:

They should correct the situation and put you back in the position you would have been in if the error hadn't occurred. As for getting the company to pay your contributions for the period of the error, you don't have a leg to stand on. You may be lucky enough to get an apology for the mistake though. 

If we assume this is a bog-standard auto-enrollment scheme, with the employer paying 3% and the employee 5%, I'd expect the employer to pay the missing employer's contributions (3% of £18k for most of a year).

The employee will be liable for the employee contributions.

IMC2 said:

I'll probably ask them to back date it and argue the toss. Management, the union, HR, etc haven't seen a situation like this before. Obviously the union will say the company should pay for their mistake and management will say I should pay as its my pension, regardless of the mistake being the companies and the repeated emails from me asking for it to be corrected.

Your union should have access to employment lawyers. since the employer contributions are part of your contractual remuneration, failing to pay them is (probably) unlawful. Take advice from the TU; this is why you pay you membership fees, after all.

vacheron

In my previous company they only recalculated everyones pensionable pay annually in January, 

This meant that if you received a payrise in Feb, you had to wait 11 months for the calculations (and subsequent deductions / contributions) to be adjusted.

Might yours be a similar situation?  

If it was an oversight, I would NOT expect the employer to be paying any of the employees missed contrubutions as you can recover the situation with no loss to yourself by simply paying the missing contributions... However, you may be able to argue that you have suffered a loss if any investments you should have bought earlier have risen in value in the interrim.

IMC2

vacheron said:

In my previous company they only recalculated everyones pensionable pay annually in January, 

This meant that if you received a payrise in Feb, you had to wait 11 months for the calculations (and subsequent deductions / contributions) to be adjusted.

Might yours be a similar situation?  

If it was an oversight, I would NOT expect the employer to be paying any of the employees missed contrubutions as you can recover the situation with no loss to yourself by simply paying the missing contributions... However, you may be able to argue that you have suffered a loss if any investments you should have bought earlier have risen in value in the interrim.

It's recalculated in April to start being deducted in June. I originally queried it before April and was told it would change in June. June came along, nothings changed. Raised the issue again. Feels like the Little Britain sketch "computer says no". Even though all my colleagues on the same contract, pay the same, and I'm the odd one out. No one seems to think the computer might be wrong.