Pension Problems- what can I do?

[pensiondisaster]

My pension scheme has just informed me that my employer has decided to take back the pension contributions they made during a four year period (2019-2023). I have asked my employer to put in writing the reasons why but am obviously very anxious. I wondered if anyone knew what, if any, rights I have to challenge this?

Is this a matter that ACAS might advise on? I wasn't sure if it was potentially an ET or small claims issue? Or is it something I just have to accept? Eek!

Without knowing the reasons why they are doing this it’s hard to advise. However with anything pension related you will have the right of complaint and ultimately if your complaint is not successful you can go to the pensions ombudsman. I suggest having a look at the ombudsman site for advice but note they will expect you to exhaust your employer/pension provider complaint process before you can raise a complaint with them.

www.pensions-ombudsman.org.uk

Or you could ring the government advice line maps.org.uk/en#

Aren't employer contributions part of your contract of employment?

What exactly was the wording?

The employer and the pension scheme are two different bodies, how would the employer be able to take anything back? Are you sure it just isn't very clearly explained?

Thank you for your replies.

I do need to get a letter or something from my employer explaining what has happened. In the meantime (as they are likely to take a very long time, I thought I should try and work out what my options may be.

In answer to some of the comments by pp - thought they were part of my contract of employment and I think my employer and pension scheme are two different bodies and as such I didn't think this was even possible. I assume they will be saying the payments were an error. My pension has reduced by the equivalent of 10k a year leaving me with virtually nothing so I dont think it's just about a poor explanation. I will look research the ombudsmen scheme.

Something about this is very wrong

Legally employers must contribute to pension schemes for qualifying employees, the amount may be contractual of higher than the minimum but the entitlement isn't

It would be incredibly unlikely that than an employer would pay contributions by mistake

Is this a business large enough to have a proper payroll department?

Are you comfortable to say which pension provider the scheme is with?

What do you mean when you say your pension has decreased by £10k pa? Are you a very high earner? How did you earn that much pension in 4 years?

Tbh this doesn't appear to make sense, you haven't said what the letter actually says

This might make sense if it is a defined benefit scheme. If the employer has paid in more than is required to provide the benefits they may be able to take money out of the scheme. However, most pensions in the private sector are defined contributions. If the employer has overpaid they may be able to recover the overpayments, but they cannot legally take back contributions they were contractually required to make, and they definitely cannot take back so much that it reduces their contribution below the legal minimum.

Having said that, a reduction of £10k pa would mean they were taking something like £130k out of OP's pension fund. If this represents 4 years' contributions, that would be an employer's contribution of around £32.5k pa, which is highly unlikely. So no, this doesn't add up.

@pensiondisaster What does the letter from your pension scheme actually say?

Sounds horrendous.

How did you hear about this change if it wasn't in writing?

It sounds like you are in a Defined Benefit scheme. Have you written to your scheme trustees to ask for clarification?

That might mean that the employer takes a pension holiday or a return of contributions (if thats possible) but the very definition of defined benefit means it wouldn't affect anyone's pension.

Thank you for all your replies. Sorry for the delay in responding - have just finished work.

I work for a large public sector organisation and am in a defined benefit scheme. I haven't had a letter from my employer about this yet - although I have asked for them to write to me ASAP to clarify what is happening.

In summary I didn't receive the usual annual statement from the pension scheme. I chased it up and the information provided was significantly different to the last one. I queried it and the pension scheme sent a very brief email saying my employer has 'decided to take back the pension contributions they made during a four year period (2019-2023)'. They couldn't provide any further information and told me to speak to my employer - so I have asked HR for an explanation. They have told me they don't know anything about it but will ask.

I'm sure they have made a mistake - in what they have done and how they have calculated the amounts ( I cannot see how they have taken so much). I just wondered what options, if any, I may have to appeal the action/decision?-obviously I can raise an internal grievance but I wondered if there was an external body who could advise me on my rights or if anyone had been through anything similar?

I'd ask the trustees as well as your employer for clarification. Your benefits are very unlikely to have been reduced. Where has it been confirmed you have lost 10k pa? Your scheme administrators/trustees would know your entitlement.

@B1indEye but the OP is stating that their entitlement has been reduced and the trustees or scheme administrator should be able to confirm why.

Thank you for your reply. It is on the annual statement.

And that seems wrong, unless the scheme rules have changed or the OP has significantly reduced her salary the calculation of the defined benefit can't have gone down by £10k to next to nothing.

How is the pension calculated OP?

I'm sorry I really dont know how the pension is calculated. My employer and I make contributions each month and I get a statement from the pension scheme every year. Last year it said that my annual pension at pension age would be just over £12k, the year before it said it would be just over 10k , the year before just over 8k. But now this year's statement says it will be just over £1k. All very worrying. I know I should understand more about it but I dont really know where to start.

I'd start by getting the scheme rules so you have all the information on how the pension is calculated, you have had this when you joined the scheme.

If it's a public sector employer maybe it's available online

Contact the pension provider and ask them to explain the difference in projections

There will be contact details for the trustee or scheme administrators on the annual statement. Get in touch with them and ask for a detailed explanation of what has happened to your pension and why the benefit calculation has changed. Ask for a copy of the scheme booklet and a copy of the rules
applicable to your benefit calculation. If the explanation does not make sense and / or seems unfair then complain to the trustee via the dispute resolution procedure (every scheme has to have one). If that does not resolve the issue to your satisfaction then complain to the Pensions Ombudsman. This is a free service and does not require the complainant to take legal advice.

Is this an NHS scheme and were you a member of 2 schemes. Maybe part of your pension has moved from one scheme to another older/ better scheme.

Good point @LivLuna!

I think LivLuna is right, if you are NHS. I think this is all to do with the McCloud remedy. Service up to 31/03/2022 was in the 2015 scheme but has now been moved back into either the 1995 scheme or the 2008 scheme, whichever one you were in previously. If you’re only looking at your 2015 scheme statement it will have gone down but you will have a separate statement somewhere for the other scheme which will have gone up.

https://www.nhsbsa.nhs.uk/public-service-pensions-remedy-mccloud

Similar things are happening in other public sector schemes so if you’re a teacher, civil service etc it may well be the same explanation.