Employer is deducting pension contributions but not paying them into pension fund

[ReallygoodyesImfine]

My employer has been deducting pension contributions from staff salaries but not passing them to our pension fund. We can see the deductions on our payslips, so they have taken our contributions but kept it, and also have not paid their contributions. I've raised this multiple times but I keep getting responses that make little sense, or promise the payments are to be resolved.

They have been reported to The Pensions Regulator, but the action from them seems vague - once filed, there are no further updates, and we can't chase for more info. The insurance company say they are doing all they can, but again, there are no clear updates.

It's now more apparent that the company has debts everywhere, and I fear insolvency.

What steps can we actually take next? Are our pension payments protected by The Pensions Regulator if they go under?

Any insights would be welcomed - it's very worrying.

You should be protected under the ppf

I'd be contacting my mp

That's theft. I'd contact the police.

Only if it’s a defined benefit pension.

Unlikely. Sounds like this is a money purchase/defined contribution scheme. The PPF only protects defined benefit schemes members on employer insolvency.

For DC schemes, if the employer goes bust then your pension pot is unaffected as it's held separately by the pension provider, but that won't help in respect of unpaid contributions. The company will still be liable for these but it could be an uphill struggle getting the money back if the company is insolvent as you'd ve like any other creditor.

Keep chasing the pensions regulator for updates but they may not be that interested if this is a small company.

This happened where I worked and the owner/employer was a crook from another country in Europe ! We went for months without being paid/ bills for the workplace not paid etc .
The place eventually went into administration and the owner owed thousands to HMRC !
The pensions regulator investigated or still are but annoyingly we didn’t hear the outcome.
Our pensions were reimbursed straight to our bank accounts from the regulator over a few months!
The owner to our knowledge has pissed off back to his country and am pretty sure he would be in prison if he sets foot back in UK .
I would be very interested to know what kind of employment you are in !

I would also have thought to report to the police before this, but apparently this is a civil matter - not a criminal one - so it's the Pension Regulator with the so-called authority to 'charge' them. It just feels like nothing is happening as they can't/won't give us updates.

Thank you. Yes, it's a defined contribution scheme.

My worry is what you say - if they are insolvent, there will be no money to make repayments. Ive read that the National Insurance Fund can step in to cover pension debts in the 12 months leading up to the insolvency - but many of our missed contributions go back way longer than that.

Oh, there are so many similarities here! So he was propping up his business using employee pension and national insurance contributions too - it's awful.

I'm glad to hear you got your money back. Did your repayments go back more than 12 months prior to the company going into administration? How did you know if the pension regulator was investigated - we can't get info.

You’re not the first, and sadly won’t be the last. Here’s an article from Steve Webb, former pensions minister - just a week ago:
Article on Pension Contributions not being paid to pension

First action to take is download and save all your payslips, and any pension letters you have. You’ll need to be able to evidence it on your side, so you can check when it’s put right. Also, you should demand that your employer compensates for loss of investment. But you’re a long way off resolution by the sounds of it.

We are all documenting our correspondence.

Thank you for the link - yes, the sense of vagueness around what TPR is doing and what they will share is apparent in that article too. That is what is so frustrating.

The insurance company said they will adjust all payments and add the relevant missed interest - but they can't do that until they actually have recieved the pension contributions.

We got our pension contributions back a few months later . It was the last 6 months of our employment that this arsehole was stealing our pension so we got it all back!
The final ‘theft’ was that he had also been contributing to a private health insurance for us that didn’t exist and it effected our tax code at the end of the financial year for all of us …a few months after we had been made redundant!
You really couldn’t make it up !
The pension regulator was really helpful when I called and should be able to confirm how much they can reimburse,if that is where the reimbursement came from.
I will try and find the letter I got confirming each monthly repayment.

You can raise a formal grievance with HR. If you don’t want to be singled as a ‘problem’ (you’re not, they are), then you could get a group of you to raise a collective grievance. Be firm that you want:

• an explanation from your employer as to how it has occurred
• details on what process changes they have made to prevent reoccurrence
• a breakdown of your calculation to show what you’re owed, and how you’re being put into the correct position
• a date by which the funds will be visible in your pension account

It may be that someone junior without much authority is not escalating it correctly to their manager. But there’s no reason why they can’t provide you with all of this information.

I would organise a staff meeting to decide on next steps. You need to work out the value of your own missing contributions and collectively to work out how large the problem is.

How big is this employer? Just checking this is UK?

I think this has gone a bit beyond “go to HR.”

Contact your MP and ask for help dealing with the regulators.

About 100 people. All affected. And yes, it's the UK.

This is helpful advice for many but not all companies have HR which was the case with our company. Literally no one to get advice from. Absolutely no management answering emails etc .The pensions regulator was really helpful and we did get our pension back .

I think you are right. Grievances have already been made, and the collective grievance could be good, but it does feel like it has gone beyond HR being able to help. Nothing seems to come from it.

Our MP is a good idea. Thank you.

It’s not about HR fixing it, it’s about gathering evidence, in writing, for OP’s own personal records. It might be required in the future.
Not to mention that, yes, sometimes junior staff realise they F’d up and try to hide things. It puts it firmly on their radar then.

That's a civil matter is police speak for 'don't want to get involved'.

Theft is taking something with intent to permanently deprive. Which may be the case here.

So sorry this has happened how awful. A question (not a judgment), did none of you read your pension statements as they should tell you how much has been put in? Who is your pension with?

It sounds like you have some good advice above, TPR can only enforce rules not compensate though.

Yes, everyone has been checking their pension statements, which show the contributions have not been passed on. But the deductions show in our payslips.

I’d be inclined to take legal advice from a large law firm with a good employment and corporate crime team. It sounds like there’s at least a possibility of embezzlement/ theft and not just incompetence.

In the meantime see if you can stop your contributions- they can’t make deductions from your salary without express written permission. Revoke that permission.

Theres strength in numbers. Are you a member of a union? If not gather together as many employees as you can and write a registered post letter to every board director (if a limited company or LLP you’ll find their names on a free search at companies house ‘find a company ‘ ) explaining your concerns, all you’ve done and that nothing has happened. Even if it’s just you who has raised this they’re then on notice of an issue. Also if the pension is managed by a separate group company etc write to them too.

You said this had been going on for years, so when was it first noticed?

Actually before all the above , have you spoken to the actual pension company where your funds are held? Is there maybe just a delay in registering the contributions at their end? If they won’t speak to you they’ll speak to an independent financial adviser on your behalf I’d think.