Scottish Widows Stakeholder Pension Plan · CAS-88861-G8X3

CAS-88861-G8X3

Ombudsman’s Determination Applicant Ms H

Scheme Scottish Widows Stakeholder Pension Plan (the Scheme)

Respondent East Ayrshire Citizens Advice Bureau (the Employer)

Outcome

Complaint summary

Background information, including submissions from the parties The sequence of events is not in dispute, so I have only set out the salient points. I acknowledge there were other exchanges of information between all the parties.

On 3 July 2012, Ms H began employment with the Employer. In accordance with her contract of employment it was agreed that “The Company will contribute 5% of your gross earnings into a personal pension scheme”.

On 11 August 2016, after a number of exchanges with the Employer, Ms H joined the Scheme.

In August 2016, the Employer paid £1,703.46 into the Scheme as a backdated payment of pension contributions on behalf of Ms H. Ms H queried the amount that was paid into the Scheme and informed the Employer that she understood that the

1 East Ayrshire Citizens Advice Bureau CAS-88861-G8X3 contributions from the Employer would be backdated from the date of her application to join the Scheme in September 2014.

The Employer informed Ms H that this was not the case and without evidence to prove this, it was unable to backdate her payment to September 2014.

On 21 March 2022, after further exchanges with the Employer, Ms H raised a formal complaint with the Employer. She said in summary:-

• In December 2021, she wrote to the manager to inform her that she was aware that the Employer’s contributions had not been calculated correctly since she joined the Scheme in 2016.

• She asked for this to be rectified and to be compensated for the potential loss of growth of her pension pot and said that she would allow a reasonable time for this to be done.

• To date, no response has been received and she requested that the Employer treat her email as a formal complaint and remedy the matter.

On 28 March 2022, the Employer informed Ms H that her complaint had been raised with the accounts team and that it would reconcile the balances for all staff affected.

On 28 April 2022, Ms H received a pay increase. The Employer agreed that this payment would be backdated to 1 April 2022.

On 28 June 2022, Ms H received a letter from the Scheme’s administrator informing her that it had noticed a missed payment into the Scheme.

On 8 July 2022, Ms H wrote to the Employer to inform it that she had received a letter from the Scheme’s administrator dated 30 June 2022, saying it had not received any payment into the Scheme.

On 12 July 2022, the Employer emailed Ms H. It said that it was processing the new pay rise for staff, and that this required it to cancel and review the pension contributions to each provider. It also said it was in the process of finalising the arrears which would be processed soon.

On 20 July 2022, JRD LLP Chartered Accountants (JRD) wrote to the Employer to inform it of Ms H’s pension contribution arrears. It said:-

“For the period of 2016 to 2017, there was a shortfall of £680.32.

For the period of 2017 to 2018, there was a shortfall of £44.04.

For the period of 2018 to 2019, there was an overpayment of £11.68.

For the period of 2019 to 2020, there was a shortfall of £78.22.

For the period of 2020 to 2021, there was a shortfall of £171.91.

2 CAS-88861-G8X3 For the period of 2021 to 2022, there was a shortfall of £84.60.

For the period until 31 March 2022, there was a shortfall of £1,047.41.

For the period to 30 June 2022, there was a shortfall of £45.99.

The overall shortfall equalled £1,093.40.”

On 26 July 2022, the Employer wrote to the Scheme’s administrator and requested help in increasing the Employer’s contributions for several members of staff in line with the staff pay increase. It also informed the Scheme’s administrator that it had undertaken a reconciliation exercise and had identified shortfalls affecting staff members which needed to be rectified.

On 27 July 2022, the Employer sent a further email to the Scheme’s administrator requesting an increase to Ms H’s pension as per the staff pay increase. It also mentioned the shortfall owed to Ms H and said it would rectify this as soon as the direct debit had been set up to reflect the increased payments for the staff pay rise.

On 1 August 2022, the Employer wrote to Ms H to confirm that her monthly pension contributions were going to increase from £95.70 to £111.03 to reflect her new salary from 1 April 2022. It said this was going to take effect on 14 August 2022. The Employer referred to the arrears that were owed to Ms H and said that these would be calculated by JRD and paid to the Scheme on behalf of Ms H alongside a compensation payment.

On the same day, Ms H wrote to the Employer and requested a full breakdown of all the calculations. The Employer responded and said it would provide this as soon as everything has been calculated.

From June 2022 to April 2023, the Employer paid no contributions into the Scheme.

On 14 March 2023, the Employer wrote to the Scheme’s administrator to inform it that the increased payments requested in July 2022 had not been processed.

On 20 March 2023, the Scheme’s administrator wrote to Ms H to confirm that her monthly pension contributions were going to be increased from £95.70 to £111.03.

On 26 October 2023, Ms H received a letter from the Employer informing her that she had received another pay increase, and her new salary was £28,155.40. It also said that the increase in pay was to be backdated to 1 April 2023 and as the Employer paid 5% of gross salary towards her pension, the direct debit would need to be increased and backdated.

On 31 October 2023, the Scheme’s administrator wrote to Ms H to let her know that her monthly pension payments were being increased from £111.03 to £117.31 as per her salary increase.

Following the complaint being referred to The Pensions Ombudsman (TPO), Ms H and the Employer made further submissions that have been summarised below. 3 CAS-88861-G8X3 Ms H’s position

She is still owed pension contributions and, despite the length of time given to the Employer to put matters right, no reconciliation had been made.

The Employer’s position

It was aware that there was a shortfall of pension contributions owed to the Scheme on behalf of Ms H and it had been trying to rectify the matter with the Scheme’s administrator.

Adjudicator’s Opinion

Ombudsman’s decision

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Directions

(i) pay Ms H £1,000 for the serious distress and inconvenience she has experienced.

(ii) pay the missing contributions to the Scheme;

(iii) establish with the Scheme’s administrator whether the late payment of contributions has meant that fewer units were purchased in Ms H’s Scheme account than she would have otherwise secured, had the contributions been paid on time; and

(iv) pay any reasonable administration fee should the Scheme’s administrator charge a fee for carrying out the above calculation.

Within 14 days of receiving confirmation from the Scheme’s administrator of any shortfall in Ms H’s units, the Employer shall pay the cost of purchasing any additional units required to make up the shortfall.

Anthony Arter CBE

Deputy Pensions Ombudsman

3 October 2024

5 CAS-88861-G8X3 Appendix Extract of Ms H’s contract of employment

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