Corporate pension

[jim]

A friend started with a new employer earlier this year. They have had the usual er and ee pension deductions each payroll.

However, they have received no communication whatsoever in relation to the pension from the pension company. Their HR says theres an issue at pension company that they are investigating/resolving. Not sure what the issue is.

My friend has been chasing this for months and has gotten nowhere. Theyve been told by their HR that their deductions will be backdated to when they commenced employment, which is reassuring but not ideal and possibly not sufficient as they may have missed out on time in the market.

They phoned the pension provider a while back and received confirmation that provider had no record of her having a pension with them.

My friend is frustrated that they have not been able to access their pension fund online to see its value, what its invested in and to make an additional avc.

Anyone any thoughts? Is this an issue for the ombudsman?

 

[T McGibney]

My friend has been chasing this for months and has gotten nowhere. Theyve been told by their HR that their deductions will be backdated to when they commenced employment, which is reassuring but not ideal and possibly not sufficient as they may have missed out on time in the market.

The way markets have gone this year, that's probably a positive.

Your friend should let their employer resolve this. Rushing off to the Ombudsman when they're resolving an issue sounds like overkill.

 

[jim]

I agree with you on all counts Tommy.

Still though, even just from a service point of view its very poor.

I'll suggets to them to just sit tight and let is get resolved.

Thanks,.

 

[LDFerguson]

There's been a lot of activity in the pensions industry this year due to a whole raft of new regulations that became active this year known as IORPS II. As a result, many pension schemes are being wound up and transferred to a different type of pension scheme known as a Master Trust. This might be a cause for delay if your friend's pension scheme is in transition, but it would certainly be reasonable to expect that she would be given a proper explanation and an expected time of completion.

As there are deductions coming out of her salary every month which are not, it seems, being passed on to a pension company, her employer is in breach of the Pensions Act which insists that contributions must be passed on within roughly a month. That said, as she's only new in the job it probably won't do her relations with her employer much good if she starts pointing this out to them.

I think it would be reasonable for her to e-mail HR and express concern that her contributions are not being invested, that she has no ability to contribute AVCs and ask nicely for a explanation of what's causing the delay and when they anticipate it will be resolved.

Regards,

Liam
www.FergA.com

 

[jim]

Thanks Liam, all good advice.

 

[bstop]

Before a complaint can be taken to the ombudsman it must be investigated under the IDR procedure of the pension provider. (Internal Disputes Resolution). The complaint needs to be clearly made using the IDR and if not resolved to their satisfaction then it can be referred to the ombudsman.

 

[jim]

Would any potential complaint be to pension provided and then ombudsman or to employer and then wrc?

 

[GSheehy]

@jim

This type of 'service' is woeful.

There should be a scheme administrator or other intermediary involved in this?. Someone is getting paid to administer/advise on the scheme and that's where their complaint should be directed.

Unless the provider is going to allocate each monthly contribution on the date that it should have been applied (I doubt they will and instead apply the backdated contributions on 'a' date) then your friend could (potentially) have missed out via euro cost averaging. Same applies to not being able to make AVCs, although they could possibly make those outside of the scheme via a PRSA AVC.

Gerard

www.prsa.ie

 

[bstop]

Would any potential complaint be to pension provided and then ombudsman or to employer and then wrc?

The employer and the pension provider can both be involved in an IDR complaint and if not resolved, then to the ombudsman.
The WRC could probably be involved if there is an employment contract issue. Maybe payment of wages act. They could argue that there is an unlawful deduction taken from their wages i.e. a pension deduction which is not actually going to the pension company.

If it works out that a loss would occur because of changes in unit prices, then this loss could be included in the IDR complaint. There might not be any loss because the markets have probably not risen much and have probably fallen more likely.

I had a complaint a few years because of a long delay by a provider after closing off a PRSA and then setting up the ARF. There were large gains in the stock markets at the time and as a result the provider had to compensate for the loss. This ran to over 1000 euro.

 

[GSheehy]

They could argue that there is an unlawful deduction taken from their wages i.e. a pension deduction which is not actually going to the pension company.

I don't know what the rules are for an Occupational Pension Scheme but if this was a PRSA Scheme where the client completed and submitted an application earlier this year, the employer deducted contributions from salary but the PRSA provider didn't get around to setting up the PRSA yet, there's nothing the PRSA regulator can do because the PRSA isn't set up.

Even though one of the employer obligations is to : pay to the appropriate PRSA provider, without deduction, within 21 days of the end of every month, any sum expressed as a cash amount or proportion of an employee’s wages or salary that the employer is obliged to pay to the employee’s PRSA provider;

There's no urgency/obligation on the PRSA provider.

If the PRSA isn't set up there's no where to allocate the contributions to so they're not deducted from the employer account.

Gerard

www.prsa.ie