Salary > Pension contribution. Is a 2-3 week delay normal?

scaashiana

Hi

My salary is paid to me on the last working day of each month.  My pension contribution is made through my salary at the same time.

My DC (I edited this to DC from DB previously, my error, it is DC) pension is with L&G and checking there, my pension contributions are normally received around the middle of the following month (i.e. 2-3 weeks after salary).  This delay seems excessive to me, given that payment transfers today are normally fairly instant.  There could be good reason for this and, before I start prodding and poking people at work, I thought I'd ask here.  Is this normal?  Where is that money during those 2-3 weeks?

I work for a large multi-national company. If you multiply my pension contribution by the c4000 people employed, that's a lot of money in a 'black hole' somewhere for several months every year (rough maths I know, not everyone contributes the same as I, but you get what I mean).

NoMore

Yes its normal and if it is a DB pension (not a DC), its irrelevant to your Pension anyway, as you don't have a pot that you have to to worry about growing.

Legally employers have to pay contributions by the 22nd of the following month following the deduction. So your employer appears compliant, I wouldn't waste your time trying to chase this.

Workplace pensions - what your employer can and cannot do - GOV.UK

scaashiana

NoMore said:

Yes its normal and if it is a DB pension (not a DC), its irrelevant to your Pension anyway, as you don't have a pot that you have to to worry about growing.

Legally employers have to pay contributions by the 22nd of the following month following the deduction. So your employer appears compliant, I wouldn't waste your time trying to chase this.

Workplace pensions - what your employer can and cannot do - GOV.UK

Thanks NoMore.

That was my error.  It is actually a DC pension (not DB as per my original post, I've ammended that).

So from what you say, it sounds like the contribution is 'sitting' with my employer every month for 2-3 weeks.

penners324

Yes, the law allows until the 22nd of the following month for pension contributions to be paid 

JoeCrystal

And pension schemes only need to report it if it is 90 days late. Thus for example my employer tend to leave it last possible moment!

Penguin_

It does take a bit of work to prepare, check & submit monthly contributions for some employers. They have to upload new starters, wait for them to be verified etc & then upload the monthly contributions. 

Scrudgy

I recently retired, but my pension contributions from my salary took between 8 and 13 (calendar) days to reach the pension, and one more day to actually be invested in the funds.

Cobbler_tone

For comparison…I get paid on the 11th and the contributions land with L&G between 14th-22nd each month. There doesn’t seem any consistent date.

dunstonh

Cobbler_tone said:

For comparison…I get paid on the 11th and the contributions land with L&G between 14th-22nd each month. There doesn’t seem any consistent date.

each month is manually input.  The employee controlling the pension contributions inputs can select the date it leaves the company bank account but a frequent default is to collect it once it has been input (which is about 3-4 days after submission).   That input completion can vary each month depending on workload.

Hoenir

scaashiana said:

I work for a large multi-national company. If you multiply my pension contribution by the c4000 people employed, 

With starters, leavers, adjustments to existing contributions etc. They'll be a considerable amount of administration to be performed. Not least financal records to be reconciled and passed on for checking. Before even getting to the  team that's responsible for making the payment. When seems like a straightforward task to you will involve many people in a chain all performing different aspects. These people will also take holidays, be absent through sickness. 

Should add the same people will be responsible for all other payroll deductions. Such as student loan , court, staff loans etc. Easy to over simplify the amount of work that goes on. 

Cobbler_tone

Not a question, more an observation. I have 'challenged' my employer as the timing of contribution vs when they deduct it from me is all over the place and getting worse.
I get paid on the 11th and normally see it land on the 18th-21st of the month with L&G.
One went in the 18th Feb, the next on 4th April (due to a split payment of salary and bonus on the 11th and 30th) and this months went in this morning after 11th April contribution.
Either the employer or L&G are not doing what they were doing as quickly as they were. Judging by the delay after the salary/bonus I suspect it is the employer.
I just don't the idea of my money sitting in no mans land for 2-3 weeks. Someone is benefitting!