Work Pension Scheme

[Girlmum2024]

Hi

Can anyone please help out with a work pensions query.

My company don't have a pension scheme. With my old employers there were great company schemes and I made additional contributions to get the maximum allowed. As such I have built up a good pension pot.

However, I have been a bit crap since I joined my new employer about making regular contributions and it's been on my list to raise it with them but not got around to it.

However I have just received this email. Text copied below.

"Every 3 years there is government mandatory requirement that people are auto-enrolled into the NEST pension.

RDP, the payroll admin, forgot to cancel this in September when you were auto-enrolled. That means for 3 months, a payment of £142.03 per month has been deducted from your salary and paid into NEST. Assuming you are happy to be removed from NEST, the total deducted amount will be included in your Dec salary payment.

Also we are talking to a pensions consultancy about putting in place a company pension scheme with employer contributions and other benefits, ideally by beginning of new year. Once this is progressed, we’ll present the options to you"

I am very confused. Why would they suggest I am removed from NEST when they don't already have a scheme? Don't they have a legal duty to provide their own if they are not enrolled on a government back one??

Not sure what to respond.

Any advice?

You haven't answered whether NEST contributions are shown as being deducted in your payslip?

Presuming they have been paying, as the email suggests, I can't see what they've done that is illegal. They've auto-enrolled you into NEST as per the law. As you have previously told them you didn't want to be enrolled into NEST, they are letting you know that they made a mistake by going against your wishes, and that they'll rectify that this month.

Quite why people are saying they've acted illegally I'm not sure.

I would respond by asking them to confirm that if you opt out of NEST, that they will contribute to your current pension with X provider and give them the details, and ask if they would consider paying in previous months contributions as well. If they won't contribute to prior months then I'd suggest you remain in NEST for those.

Yes I was auto enrolled and it seems they forgot to unenroll us.

I never noticed the payments coming out recently as it was such a small amount and part of my salary is commission based so it can fluctuate.

You haven’t indicated if you have lost out? If you have been included in the Nest arrangement and both employer and employee contributions have been paid in then you may have benefitted from salary sacrifice and the growth in the contributions. I wouldn’t automatically request the refund as technically they may have met their obligations albeit in a roundabout way. You can then look to move to the new workplace pension provider once in place.

Quite why people are saying they've acted illegally I'm not sure.

Well, for a start an email is not a valid opt out.

Well they cannot coerce /persuade/encourage you to opt out for a start. The letter.

They cannot opt you out before enrolment. They have to enrol you first, then you opt out. For our scheme you have to send an email with the wording "I confirm that I have personally submitted this notice to opt out"

You can create an account with NEST and check your contribution. If your workplace hasn’t contributed then you can ask them too or opt out of NEST and find another scheme- sharing the details with your employer. I forgot my log in details some time ago and emailed them- they helped me access my details.

You can opt out by sending your employer an email. But the email has to contain certain information/wording.

Your employer also has to send you details of their scheme and tell you that you have been enrolled. They can defer enrolment for up to 3 months from when you join a company but that is all. You can only opt out AFTER you have been enrolled.

They cannot coerce you into opting out by offering other benefits instead (such as paying into a personal scheme unless that scheme is auto enrolment complaint. We had to close a fantastic company pension with our FA when auto enrolment first came in as that pension was not compliant with auto enrolment.

I have lost out, yes as payments have only been paid for the last 3 months and I have worked here for almost 3 years. The email I just received says "Every 3 years there is government mandatory requirement that people are auto-enrolled into the NEST pension. the payroll admin, forgot to cancel this in September when you were auto-enrolled."

They are suggesting they were meant to cancel it on the basis that I had opted out when I joined.

But I only agreed to opt out on the basis that they paid into my personal pension but that has never happened. Again, I assume that is my problem as I never sent them the details and they never chased it. Pretty poor planning on my part but always worked for big employers and never had too think much about it.

The onus is on you to provide the details to your employer. There are rules on employer and employee contributions, as long as you have not exceeded your allowance you can go back three years but you will only be able to claim the employer contribution if you pay in the employee contributions. If you have enough savings to cover the contributions it may be worth it but it depends on the “rules”. Again a financial adviser will be able to help you.
I doubt you will be able to claim the employer payments if you haven’t paid into your pension during the three years you have been opted out.
Now you have updated it is clear that your employer has acted legally. Every 3 years you are automatically opted back in. Have you missed the letter/email that is usually automatically sent out to give you the option of opting out again?
Going forward you need to sort out with whoever does the payroll so your contributions go where you want. If you hadn’t opted out you could have moved your pension to your normal pension once you had sorted out your preferred pension.

tbh, if you opted out of NEST, never sent them your pension details and never questioned the lack of pension payments on your payslip I do not think you can blame the company

Probably not but very irritating all the same. I am an idiot. Will ask to stay in NEST for now and figure out if it is better to move to my own scheme. Would be good to know that I can ask to have them to make some back dated employer contributions - I can make my own back contributions.

Can you post the text of the original email from your employer (minus identifying details) and I can see if I think it looks compliant or not.

Also did you get a welcome letter from NEST when you joined the company 3 years ago.

She hasn't been opted out though. If she replies saying yes she still wants to opt out they may well then send her the required paperwork.

Right now as it stands they have done the correct thing.

She was opted out three years ago. But by the sounds of it, not in a legal way.

From the OP

My company don't have a pension scheme

Not legal.

I have just received this email. Text copied below.
"Every 3 years there is government mandatory requirement that people are auto-enrolled into the NEST pension.

Legal.

RDP, the payroll admin, forgot to cancel this in September when you were auto-enrolled.

If OP wasn’t advised that she would be opted back in if she didn’t actively opt out, this assumption that she wanted to opt out is not legal.

Assuming you are happy to be removed from NEST,

Not a legal assumption.

Also we are talking to a pensions consultancy about putting in place a company pension scheme with employer contributions and other benefits, ideally by beginning of new year. Once this is progressed, we’ll present the options to you"

But they have a pension scheme already, because that’s what OP has now been opted back into. If they haven’t got a pension scheme, as per the OP, what has she been opted into for 3 months?!

Also offering to pay into a private pension scheme on condition the OP opts out of an auto enrolment scheme such as NEST - not legal

This was the text of the first email received shortly after joining:

“As employees of X I will need to enrol you on the NEST Pension scheme where a portion of your payroll goes into the scheme as per government requirement. Then you will receive a pack from NEST and then you can choose to opt out of NEST and you will be reimbursed whatever was paid into NEST.

I think every two years we have to go through this process.

Separately will come back to you both on pension payments for your own allocation.”

I don’t recall receiving any pack from NEST but then several months later I received this second email:

“Hi x,

As discussed this is a tally of the pension deductions which were incorrectly deducted from your pay 3 months after you started until end of x period.

You can see the total and I would like to get this reimbursed to you in this month’s pay. If you can confirm you are ok with this by reply to this email I will get this processed.

From now on I’m going to send everyone their payslip at the end of each month.”

Followed by a third email a couple of days later:

“Please find attached. These payments were being deducted net of tax so reversing it this month will mean a higher post tax salary payment vs normal.

Also can you confirm in reply to this email that you were ok not being enrolled in the NEST employee pension scheme.”

I replied to this one asking for a meeting to discuss the emails as I didn’t understand them ( I presume there had been an earlier chat advising me that pension deductions had been made incorrectly as the email says “as discussed) and they would be re imburse me. I now recall them saying they had made an error in not enrolling me and saying I need to send an email saying I was ok with that, but I don’t remember the details and there is nothing in writing)

Following that meeting I sent the following email:

“Just to confirm that as agreed I was ok to not be enrolled in the NEST pension scheme. I have a personal pension and I will share details with you for use from next payroll.”

I received this reply by email:

“Thanks X. Also to confirm what we discussed yesterday, we will reverse the pension deductions which were not paid to you in this month’s payroll.

In addition we will make a one-off payment for the owed 5.0% company contribution to your personal pension once we have your selected personal pension details and will also start the monthly contribution then.

If you wish to add up to 3.0% of base salary as salary sacrifice to pension we can also set that up then.”

Then heard nothing until the email today:

“Every 3 years there is government mandatory requirement that people are auto-enrolled into the NEST pension.

Payroll admin, forgot to cancel this in September when you were auto-enrolled. That means for 3 months, a payment of £142.03 per month has been deducted from your salary and paid into NEST. Assuming you are happy to be removed from NEST, the total deducted amount will be included in your Dec salary payment.

Also we are talking to a pensions consultancy about putting in place a company pension scheme with employer contributions and other benefits, ideally by beginning of new year. Once this is progressed, we’ll present the options to you.”

Quite confused but also embarrassed that I have been so slack in having dealt with this before now. Sorting my pension has been on my "to do" list but never get around to it (not least as I find it all so confusing and I have procrastinated) but this email has prompted me to sort it out.

Wow, none of that is legal. You should have had the joining pack from NEST and opted out properly only after having read about the scheme and being able to make an informed choice.

You have a couple of options.

You can approach your company and ask if, in the light of the fact that you were never given the correct information about the NEST pension and did not properly/legally opt out, will they make those contributions into a personal pension of your choice.

If not you can contact the Pensions Regulator and make a complaint abot the fact your employer has acted illegally.

But if NEST have auto enrolled me how come I haven't received a welcome pack from them? Who would send that?

Also, why would they be encouraging me to opt out? Presume they want to avoid employer contributions but why would they prefer to pay into a personal scheme if indeed that's what they would prefer?

I want to get my facts straight before getting into an argument with the company. Can I have an off the record discussion with the pensions regulator or maybe I should speak to a pensions advisor.

The welcome pack would come from NEST once your employer entered your details into their system. Which leads me to believe they never did.

Did you get the 5% and 3% contributions the wrong way around. I suspect they bank on most people not bothering to set up a personal pension.

Also - looking at my email I didn't actually opt out. I just said I was fine with the fact that they hadn't enrolled me. But I definitely wanted to be enrolled in a pension scheme.

What I don't understand is if everyone is auto enrolled how come they were asking me to confirm that I was ok with the company not enrolling me? So confused.

ok, that makes sense. I think when I joined they never entered my details, hence why they offered to pay into my personal pension as a one off.

I didn't get the 3 and 5% mixed up - have only copied exactly what was sent to me.