How soon after salary deduction, should you see your contributions added to your Pension fund?

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MrEarl

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Hello,

I'm a member of my employer's DC Scheme, and make monthly pension contributions through payroll, in addition to those made for me, by my employer.

Over the last few months, I've noticed that it's taking significantly longer for credits to appear on my (Irish Life) pension, having seen funds deducted from payroll, on the same date as before. It's currently taking up to 4 weeks, having historically only taken a few days.

What I'm ultimately wondering is, is there a time deadline for funds having to be applied to your DC fund, once deducted from your salary?

Many thanks,
 
MrEarl said:
Hello,

I'm a member of my employer's DC Scheme, and make monthly pension contributions through payroll, in addition to those made for me, by my employer.

Over the last few months, I've noticed that it's taking significantly longer for credits to appear on my (Irish Life) pension, having seen funds deducted from payroll, on the same date as before. It's currently taking up to 4 weeks, having historically only taken a few days.

What I'm ultimately wondering is, is there a time deadline for funds having to be applied to your DC fund, once deducted from your salary?

Many thanks,
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From past experience there seems to be a lag from when the pension deduction is made from payroll and it appears on pension account. In our case its typically 3 weeks later on average. So, pay 23rd of month and shows on pension 11th,12th of following month and that's not an Irish Life pension.

In a previous life I was a trustee of a pension fund and queried this to be told it was normal industry practice that's 20 years ago mind.

Perhaps your employer has moved the date it transfers the money?
 
I find it's unpredictable when the funds appear in the pension each month. Sometimes it can be 2 days. Sometimes, particular around December January it can take 30 days.
 
MrEarl said:
Hello,

I'm a member of my employer's DC Scheme, and make monthly pension contributions through payroll, in addition to those made for me, by my employer.

Over the last few months, I've noticed that it's taking significantly longer for credits to appear on my (Irish Life) pension, having seen funds deducted from payroll, on the same date as before. It's currently taking up to 4 weeks, having historically only taken a few days.

What I'm ultimately wondering is, is there a time deadline for funds having to be applied to your DC fund, once deducted from your salary?

Many thanks,
Click to expand...
21 days after the end of the month in which they were deducted. You need to talk to your employer. Good chance they changed the date of when they send them to the life company.
 
There are two common practices that we come across...

(1) The pension contribution is deducted automatically by Direct Debit on the 1st of the month following payday. So for people who get paid on the fourth week of a month, this works well as the contributions appear around the 2nd or 3rd of the following month. However, it's inflexible because if the Direct Debit amount is to change, someone has to notify the pension company to change it. That can take weeks, so generally this system works best where changes to contributions are only permitted once a year.

(2) HR department upload details of the contributions to the pension company every month, which then triggers a Direct Debit. This system is flexible as it accommodates changes in pension contributions every month if required. However, the timing is not as reliable - if the HR person is busy, or sick then there might be a delay in getting the contributions uploaded to the pension company and a resulting delay in collecting them and seeing them on the pension system. The rule is as Steven points out in post #5 above, but in my experience this is not always abided by.
 
Steven Barrett said:
21 days after the end of the month in which they were deducted. You need to talk to your employer. Good chance they changed the date of when they send them to the life company.
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Is it not that the Employer has 21 days to pay the contributions to the pension company and the pension company then has a further 10 days to invest the contributions? So a total of 31 days?
 
Peanuts said:
Is it not that the Employer has 21 days to pay the contributions to the pension company and the pension company then has a further 10 days to invest the contributions? So a total of 31 days?
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A pension company will invest using the prices of the day after the money is received. One of the life companies was taking 6 months to apply pension contributions from last November. All policyholders had their investment from the day after the money was received.

I am not aware of the 10 day rule rule but I'm not involved in the pension scheme area.
 
A friend works in Payroll, and i asked this very question a while back.

He told me most of the multinational companies he has worked with pay over the deductions at the same time employee nett pay is paid, or within days of that date.
However, this varies from company to company. In his experience, it is usually Payroll, who are responsible for oaying the funds over, but can sometimes be a HR task.

In his experience, the delay in crediting(after paid over) to employee pension fund accounts varies, depending on the pension company, but he said Irish Life were one of the slower companies to apply the funds.

From my own personal experience of transferring in 2 smaller pensions into a previous employer scheme, i had several issues with Irish Life, the worst case, was a balance i transferred in, that Irish Life had been given advance notice of, but it stayed in their bank account, for almost 2 months before it was credited, which took several phone calls and emails.

Ultimately, the internal processes of Life Companies varies, but there is an employer obligation/trustee obligation. to make sure/ or monitor, that the funds are credited to employee fund accounts in a timely manner.
It is usually a “check” that appears in the annual trustee report, but in many cases, a delay failure, is often ignored.

If delays to payments is an ongoing issue, a pension scheme member, should contact the trustees to escalate the issue, thats their job.
 
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