Company Pension employers contribution

[Wowarentyoutall]

I'm in a final salary pension at the Company I work for, during Covid they stopped paying their contributions in for 21 months ( their reason was there was more than enough in the pension pot to cover it ) they then stopped contributing again in July last year and still aren't. They never told us they were stopping it , it was only when I spotted it missing on my payslip and queried it , again they said there was more than enough in the pot ). This pension closed to new employees about 20 years ago so there's only a few of us in it now.
Company is doing really well so I'm not worried that I'm going to lose my pension just want to know if this is allowed.

I'm no expert but a quick Google search has confirmed that all employers must make pension contributions. You need to get some advice from a qualified expert and/ or your union

Payment holidays on DB schemes were all the rage on 80s/90s but rarer these days. Funds not performing as well and not meeting the payout expectations. Given it’s closed to new members at least the risk can’t get any bigger. Ask your employer for a report about why the trustees say this is a safe decision ideally with some actuarial back up data!

It depends whether it's a defined benefit or defined contribution scheme.

Defined Benefit - they are committed to giving you a pension that is some fraction of either your final salary or career average salary when you retire. If their previous contributions have been invested successfully such that they have made such an investment profit that they can be confident of meeting their commitments long term then there is no problem with them taking a contributions holiday, thoughit is worth querying whether their assertion that this is the case has been independently verified.

Defined contribution - where you and your employer put in a percentage of your earnings and how much pension you get is based on fund performance between now and when you retire, then taking a break in contributions like that is a breach of contract and absolutely not ok

I see you say it is Final Salary so totally ok so long as they have independent verification that their liabilities are covered.

It's in the first line. OP is in a final salary scheme - which is a defined benefit scheme. Employer contributions will be set out by the trustees/auditors to ensure there is enough in the fund to meet the obligations and liabilities to the beneficiaries.

OP - you should be getting an annual statement from the trustees which lays out the fund size, growth etc.

You need to contact your Employee Representative on the Pension Trustee board and ask them to share their advice and the actuarial analysis showing why it is ok to pause the Employer contributions.

It may be fine. It may not be.

Try and get a bunch of employees on the scheme to make the same request - it will carry more weight if lots of employees ask and ask.

OP, do you have a copy of the latest Summary Funding Statement? This should tell you whether there are enough assets to meet the liabilities in the pension fund.

If the fund does have a surplus then, yes, the company is allowed to take a contributions holiday.

Thanks everyone , I just wasn't impressed that looking back to covid and now altogether they have missed paying for 28 months so just didn't seem right when you think you join a pension & your employer contributes

Your employer has already contributed - probably by a fair amount if they have enough of a surplus to take a contribution holiday. Your benefits will depend on whatever you have been promised, rather than what your employer is currently paying.

@Wowarentyoutall the point is that whoever takes the risk and will end up poorer if the economy goes screwy is always the same as who gets the reward and gets richer if investments go well.

You have a defined benefit pension, you have no risk. It doesn't matter to you how the company meets its obligations to youeither from additional cash contributions into the fund or from the excess investment income from previous contributions. Nothing they do or don't do will increase or reduce your entitlement. Your employer is taking the risk and if their risks pay off (which would be measured by an independent audit saying that there are enough funds without contributions in any given year or run of years) they get to reap the reward.