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.

Some of my colleagues noticed it in 2024. I have not been there that long.

Thank you for this. Unfortunately, I think this is the stage we are at.

Don’t stop your contributions. It will only hurt you in the long term. Providing you have no reason to expect the employer will become insolvent this doesn’t actually help you long term.

I don't know if this will help you or not, but perhaps asking Martin Lewis to investigate it will trigger the regulatory authorities taking it more seriously and perhaps raising any loopholes that exist that allow such rogue employers to get away with it.

There is a formal process to follow:

1. Inform your employer in writing about the missing contributions and ask them to make good the missing contributions. You can also ask for compensation for missed investment returns
2. If 1 doesn't resolve the issue, you can complain to the Pensions Ombudsman 3) The pension provider should report the missing payments to the pension regulator. You can also do this yourself (and sounds like you have already)

Make sure there is a paper trail, don't rely on conversations

If the company goes bust can claim compensation for missing employer contributions. You can also make a claim against the administrator

If the company aren't doing any matched contributions then it might be easier to stop contributions, ensuring you get money direct. Then invest in a sipp and claim back the tax advantage.

And look for a new job with a company that can be trusted.

So if you started after the pensions stopped being funded, does that mean that your workplace pension account from this employer is £0?

This is the right advice, although before you can complain to the Ombudsman you will need to show that you have exhausted the company’s complaints process - evidence that the company has been ignoring you may be enough but you will probably need to show that you have submitted a formal complaint via their usual process.

The Ombudsman regularly makes determinations about companies that have not invested pension contributions taken from employees and as far as I can tell they’re all upheld in the employer’s favour. There’s usually an additional payment for distress and inconvenience too.

Why did people stay working there so long in these circumstances?!

Try ACAS ... possible "illegal deduction from wages". Temporarily you might want to consider coming out of the pension scheme and get the money in your wages instead? Take advice though!!

You've had a fair bit of good advice about what to do about your pensions.

One additional thing I'd do, if you haven't already done this, is to check your National Insurance record, to make sure that your NI payments have been passed on. If they aren't paying the money to your pension provider, it sounds as if they may, also, not be paying what they owe in NI. If that's the case, I think it's something the DWP, and/or HMRC, would take very seriously.

Out of 100 people how come no one seemingly did anything about this earlier?! Especially if it’s been happening for two years?!

I look at my current workplace pension monthly and my old ones quarterly to see how they are doing. Surely at least a small percentage of the 100 people do a similar level of due diligence?! And if the company are not paying it in, why are people suggesting to speak to HR?! Surely the HR team (if there is one) is also affected.

Every employee affected can report to pensions regulator. You can do it by phone but also they have an online facility to do this the more the better picture they will have.https://www.thepensionsregulator.gov.uk/en/contact-us/scheme-members-who-to-contact/report-concerns-about-your-workplace-pension/report-missing-payments-to-your-workplace-pension

Your pension company will know about these missing contributions too and should have informed the Pension regulator so PR will be going through the process behind the scenes to sort this out, this involves various layers of communication and fines. But that's what PR is for, enforcing that businesses are compliant, they're not there for you in the strictest sense so don't put your eggs all in one basket as they say.

You need 2 more things.
Speak to the pension company, it's your pension, yes it should have already been flagged with PR but see what you can do there especially about missing contributions. It wouldn't be the first time a pension company have misplaced contributions but it doesn't sound like it in this case.

Pension ombudsman is where you should also go - you make a complaint, generally they expect you to have raised it with your employer before that. The ombudsman is more for the people whereas PR for the employer side.

Shame people have nothing better to do! Bizarre!

If it’s been two years since it was flagged to the employer and they haven’t done anything about it why have you not gone to the police? That clearly moves into the territory of intent to permanently deprive rather than an admin error etc.

What other post? This is the first time I’ve spoken out about this

What?!! Don’t reply if you don’t have anything nice to say

have you checked your tax contributions too via government gateway -? My mum many years ago worked somewhere that wasn’t paying tax or Ni over

Thank you to everyone who has offered useful advice - there is a lot here to go on for next steps which I will look into.

Report it to HMRC, if they aren't paying the pension payments you can bet they aren't paying tax & NIC payments either.