Reasonable Time to Credit Payments into DC Scheme

BikingBud

Given that banking now operates near instantaneously and wages are paid on a certain day and can be drawn immediately what is the expectation for credits to show on DC pensions schemes.

If immediate great.

If 2-3 days OK.

If over 3 days, this appears excessive and where has my money gone during this period?

Why is there this delay and how has it become the norm and is justified.

After all the fund will also extract management fees as well. 

Dazed_and_C0nfused

BikingBud said:

Given that banking now operates near instantaneously and wages are paid on a certain day and can be drawn immediately what is the expectation for credits to show on DC pensions schemes.

If immediate great.

If 2-3 days OK.

If over 3 days, this appears excessive and where has my money gone during this period?

Why is there this delay and how has it become the norm and is justified.

After all the fund will also extract management fees as well. 

In some situations I think the money deducted in one tax month doesn't have to be paid to the pension scheme until the 22nd of the following tax month.

https://www.gov.uk/employers-workplace-pensions-rules

BikingBud

Cheers D&C, that's outrageous really!

How they can consider a delay of nearly a month "on time", especially the first 3 months do not need to be paid until 22nd of the 4th month.

I wonder who dreamt up that part of the legislation?

Tommyjw

There is still some manual input required, checks and balances, new starters/leavers of which i believe new employees have to be verified in the payroll system first, adjustments to contributions etc to be input and checked, all to which require a minor or major manual input before it's done.

All it then takes is in more of a smalller business focus perhaps the people with the knowledge to be off sick/holiday, a software issue, some confusing outputs which need to be checked with other departments, trying to contact staff 1 on 1 to question changes made before loading the payments, identifying why totals dont add up etc which will add time onto the process.

So i can see why the allowance is there, but yes in general allowing such a long period seems silly. 

Dazed_and_C0nfused

It follows the payment schedule for PAYE tax and NI deductions.

Deductions in the tax month have, in most cases, to be paid by 22nd of the following tax month.

As auto-enrolment is effectively another part of the same payroll process maybe it was the easy option to fall in like with existing timescales?

BikingBud

Tommyjw said:

There is still some manual input required, checks and balances, new starters/leavers of which i believe new employees have to be verified in the payroll system first, adjustments to contributions etc to be input and checked, all to which require a minor or major manual input before it's done.

All it then takes is in more of a smalller business focus perhaps the people with the knowledge to be off sick/holiday, a software issue, some confusing outputs which need to be checked with other departments, trying to contact staff 1 on 1 to question changes made before loading the payments, identifying why totals dont add up etc which will add time onto the process.

So i can see why the allowance is there, but yes in general allowing such a long period seems silly. 

Sorry there is nothing there that should not be achievable in significantly less time. New accounts within a payment cycle, payments to existing accounts 5 working days. 

New joiners to company with P45 or new joiner certificate - easy to get/set tax codes no?
New joiner to pension scheme same - set up account, deduct payment and allocate to nominated account same simple effort?

Why is it any different to a direct debit, once set up it works. And even if there are some glitches they should be the exception not the norm.

If we allow all that time it will be abused! 

If it is required to be efficient then it will be.

Hoenir

BikingBud said:

Cheers D&C, that's outrageous really!

How they can consider a delay of nearly a month "on time", especially the first 3 months do not need to be paid until 22nd of the 4th month.

I wonder who dreamt up that part of the legislation?

Payroll departments have all manner of ad-hoc deductions and administration to deal with once the payroll is run. Not just a question of pressing a key on a monthly basis. Then there's staff absences and shortages to be factored in. 

BikingBud

Hoenir said:

BikingBud said:

Cheers D&C, that's outrageous really!

How they can consider a delay of nearly a month "on time", especially the first 3 months do not need to be paid until 22nd of the 4th month.

I wonder who dreamt up that part of the legislation?

Payroll departments have all manner of ad-hoc deductions and administration to deal with once the payroll is run. Not just a question of pressing a key on a monthly basis. Then there's staff absences and shortages to be factored in. 

I get that. That's why they have cut off dates.

And I get that set up of new accounts might be late in the month, depending upon employee start date and may take some additional effort but once on payroll and once the employee has a pension stub account then if it is not running without manual intervention it is not running effectively.

So how long does the admin actually take to set all the pension payments up, 15 mins per staff member, 60 mins, 90 mins so that when they do press the key to execute the pay run it just occurs?

First month I missed the payroll but I now get paid on 24th, no changes, no 15/60/90 mins to adjust my occurrences, no excuses for any delay.

Staff absences and shortages = ineffective prioritisation and management.

They appear to have been given very poor target and are hiding behind it rather than actually being efficient and working in the employees' interest.

Dazed_and_C0nfused

BikingBud said:

Hoenir said:

BikingBud said:

Cheers D&C, that's outrageous really!

How they can consider a delay of nearly a month "on time", especially the first 3 months do not need to be paid until 22nd of the 4th month.

I wonder who dreamt up that part of the legislation?

Payroll departments have all manner of ad-hoc deductions and administration to deal with once the payroll is run. Not just a question of pressing a key on a monthly basis. Then there's staff absences and shortages to be factored in. 

I get that. That's why they have cut off dates.

And I get that set up of new accounts might be late in the month, depending upon employee start date and may take some additional effort but once on payroll and once the employee has a pension stub account then if it is not running without manual intervention it is not running effectively.

So how long does the admin actually take to set all the pension payments up, 15 mins per staff member, 60 mins, 90 mins so that when they do press the key to execute the pay run it just occurs?

First month I missed the payroll but I now get paid on 24th, no changes, no 15/60/90 mins to adjust my occurrences, no excuses for any delay.

Staff absences and shortages = ineffective prioritisation and management.

They appear to have been given very poor target and are hiding behind it rather than actually being efficient and working in the employees' interest.

As you clearly feel strongly about this there is a simple answer that you are 100% in control of.

Leave your employers scheme and make the payments into a pension of your choice at the time/date that works best for you.   

From what you have posted money could be in your pension roughly 4 weeks earlier than it is now.

BikingBud

Still no actual justifiable reasons for the delays, just repeating, because that's the way it is! It's like listening to parents who say "because I say so!"

@Dazed_and_C0nfused - Do you work for a pension company?

Interesting that this is considered only to be my problem and the behaviour and actions of the large corporate bodies are just something the little people have to deal with. But why should I have to accept an ulterior product to get the level of service that should be mandated by regulation?

Another example of where responses on a money saving site appear wholly at odds with the intent of the site, "Cutting Your Costs, Fighting Your Corner".

Am I really the only one here that feels it is grossly unjust?

eastcorkram

BikingBud said:

Still no actual justifiable reasons for the delays, just repeating, because that's the way it is! It's like listening to parents who say "because I say so!"

@Dazed_and_C0nfused - Do you work for a pension company?

Interesting that this is considered only to be my problem and the behaviour and actions of the large corporate bodies are just something the little people have to deal with. But why should I have to accept an ulterior product to get the level of service that should be mandated by regulation?

Another example of where responses on a money saving site appear wholly at odds with the intent of the site, "Cutting Your Costs, Fighting Your Corner".

Am I really the only one here that feels it is grossly unjust?

Not sure why you expect anyone on here to give you justifiable reasons for it. My works scheme always took three weeks. 

How about tax relief added to a SIPP. I have got one with Fidelity, which I pay into each month. The tax relief has not been added for the contribution made on 06/12/24 yet. I've no idea why it takes that long.