Woolly question re pension contributions

[Aussieng]

I'm wondering if anyone has any advice as to how to get a situation sorted out, who is actually responsible for what and what I can do about any loss I may have incurred.

Basically I discovered in receipt of my January payslip that my employer had failed to deduct my pension contributions for 14 months from November 2008 to December 2009. My employer had consequently also failed to make 10% employer pension contributions to my pension fund. Two months on absolutely nothing has happened by way of me being provided with any details of how or whether this is to be rectified despite me asking that this be resolved this tax year.

HR have passed the issue to our internal pensions officer who emailed me and advised me that he would let me know if any rectification action was required by me. I've heard nothing further from either party.

My concerns are:

Am I entitled to insist that the arrears be taken from my salarly and that my firm is required to make the matchinc contributions to which I am contractually entitled?

is there likely to be any recourse regarding the following issues:

During 2009/2010 I was a higher rate tax payer. It now seems highly unlikely that this issue will be resolved prior to 5 April and for 2010/2011 I will only be a BR tax payer which means I will lose 20% tax relief on these contributions. Am I likely to be able to recover this loss from my employer?

Obviously the stock market has risen by something like 60% since April 2009 so presumably the lack of contributions into my fund has also causeed some opportunity loss there. Again, am I likely to have any redress over this?

Thanks for any help - pensions are really not my thing!

[RibenaBerry]

I'm not an expert on pension contributions, but I think you're probably on rather shaky ground given how long the situation has been going on. How did you not notice this on your payslips for well over a year?

[Kathyjelly]

I had some delayed payments too. The answers seemed to be...

If the pension payment was in your contract, your employer has to pay their past contributions.

They have to agree with you how your contributions will be taken, ie lump sum, gradually out of pay packet etc.

The pension payments should be back dated as 09/10 payments and so will be offset against your 40% tax. Your P60 should reflect that.

You don't have to do your 09/10 tax return until end of 2010 so they have nine months to sort it out.

You won't get any recognition of opportunity loss.

Pensions are a complete bugger aren't they.

[RibenaBerry]

I think that the issue might be that the situation has been going on for so long that, although there may be some back payment, they may argue that they shouldn't have to cover everything.

BTW, how did the error occur OP. Did a form fail to get processed?

[Aussieng]

Ribena - I have no idea how the error occurred. Ridiculously in January when they re-instated collection they still got it wrong (this time by overcollecting £20). This overcollection for Jan they have rectified and given me a full explanation as to why it occurred but with regard to the missing £2,500 (plus employers) there is pretty much radio silence as to how this happened.

I know I have to accept some responsibility for not having noticed. The reason I did not notice (to answer your question Ribena) is that I was transferred to my current job in the regions from London and on London rates which is fab but naturally means that I have not had a pay rise for several years so my pay has been static with one exception. The exception being that in Sept 2008 I got married. We have a flexible benefits scheme at work and on the occassion of marriage you are entitled to make certain changes to the benefits you select. I did this and this took effect from the Nov 2008 pay. I was also awarded a non-consolidated bonus effective at the same time. The impact of these changes in addition to the failure to take pension contributions (beraing in mind that after tax relief this is not as much as the actual loss which I have sustained) had an impact on my salary which seemed reasonable and was not in aggregate terribly noticeable and did not prompt me to look at the Nov payslip. I then receiveed the exact same rate of pay for 14 months up to and including Dec 2009 so again - no reason to check. Take into account the fact that we have electronic payslips so you have to actually log onto a system to look at your payslips and I just did not notice it until Jan 2010 when having opted to sell some of my holiday entitlement for the 2010 year I was a bit shocked to find my pay had actually decreased!

Kathy - backdating sounds good (just bad timing in view of impending mat leave but I can cope with that). I'm ashamed to say that I work in taxation (corporate) but pensions just make me want to cry and bury my head in the sand.

Ribena - do you mean that they will say they should not have to pay the back-dated employer contributions because of how long this has been going on?

[RibenaBerry]

If your employer simply had to make contributions then it would be their problem to rectify.

However, as I understand it, their contributions were conditional upon you making yours. They may pay up no problems, but they may argue that effectively you bear some of the responsibility for not realising in a timely fashion and that, therefore, they are not going to cover all the back payments (i.e. you both failed to pay, so their responsibility to do so falls away).

Hearing more about your employer, it sounds like they are large, so probably will pay up if you do. It probably isn't a big cash flow worry for them. I think it's unlikely that they'll compensate you for the opportunity loss though since, if you'd checked your payslip, that loss could have been avoided.

Sorry to sound mean, but I think you do bear some responsibility for this going unnoticed for so long. I understand how you didn't miss the money, but it is important to check these things....

[Aussieng]

Yes they are large but also surprisingly tight. Partnership so every penny they spend is directly out of partner profit share.

I think half of their contributions are matched and half are just contractual. I think that I can elect in my flex benefits whether to pay the 5% or more or less than that and they match accordingly but they pay 5% regardless. Possibly because we did salary sacrifice some time ago>

No - you don't sound mean but to be honest I could have checked at any point in 2009 and my payslip would have just looked like the month before and the month following and I would not have noticed. Our pensions position is pretty complicated (final salary was bought out some time ago plus the impact of salary sacrifice) and I know that I get some special treatment re the old final salary buy out compared to new joiners and would have just assumed that this all contributed to my payslip looking as it did.

Anyway I guess I will start to kick up a fuss about not having had a response. Is there anything to be gained by contacting our pension scheme administrators directly or is this strictly between me and my firm>