Delays in purchasing units during a given month

Z

zag

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I have noticed in my work defined benefit scheme that no units were purchased this month, despite me paying into the scheme. I can see this because the online access to the pension scheme shows €x of contributions but NIL units purchased.

From what I can tell this means that the pension company received the money from my employer (or else they would show NIL contributions) but have so far failed to buy units in the funds. They appear to be sitting on my money. I checked the online stuff somewhere in the middle of the month and they had received the funds by then.

I guess (being the last day of the month) I will see the units purchased today. If not, then it will have been over a month since the money left my paypacket and I still have not seen any benefit.

I have a bit of a conspiracy theory hatching in my mind about why this delay exists, but nothing definite.

Question - is it 'normal' for pension companies to operate like this ? Should/would they not simply buy the units on the day the money is received from the employer ? I know there is a cost of purchasing, but surely that is what we pay our management fee for.

Cheers,

z
 
As far as I recall employers must remit pension (well at least PRSA) contributions within c. 21 days of deduction from salary. I'm not sure what, if any, deadline applies in relation to the pension underwriter buying units with that money. However in the past I have made contributions to personal pension plans which were recorded on the a particular date and even though the units only appeared in the account on a later date the unit prices were backdated to the date of receipt of the contributions.
 
A search through the Pensions Board website and http://www.irishstatutebook.ie throws up the following section in the 2002 Act -
"(a) to ensure, in so far as is reasonable, that the contributions payable by the employer and the members of the scheme, where appropriate, are received and that the sums referred to in subsection (1) or (2) of section 58A are invested in accordance with paragraph (b) within 10 days of the latest date on which those sums should have been remitted or paid by the employer under subsection (1) or (2), as the case may be, of section 58A;
"

It's not clear to me because this is amending an earlier Act, but from what I can tell this means that the funds received must be invested within 10 days of the 21 days from the end of the month ("by which those sums should have been remitted . . . ".

In other words the trustees must ensure that the funds deducted from an employees payslip are remitted within 21 days of the end of the month of the deduction. The funds must then be invested within 10 days of the end of the 21 day period. Essentially this means by the end of the (31 day) month following deduction.

This seems unduly lenient in this day of electronic trading. I don't understand why the pension company shouldn't have to buy the units within 1 business day of receiving the funds.

Another thing to note is that the 21 day period is from the end of the month of deduction, not from the date of the deduction. If you happen to be paid on the 5th of January, the trustees can remit the money any time up to the 21st of February and the pension company don't have to invest it until something like the 2nd or 3rd of March. Seems crazy to me.

z
 
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