TPO upholds complaint against BTGL for maladministration

The Pensions Ombudsman (TPO) has upheld a complaint against Bolton Textiles Group Limited (BTGL) after it failed to pay the correct contributions into the complainant’s pension scheme.

Mrs Y was an employee of Bolton Textiles Ltd for over 27 years, when the firm when into administration in May 2017.

As part of the administration process, in March 2017, the administrators completed a transfer of all employees from Bolton Textiles Ltd to BTGL, meaning that BTGL had responsibility for ensuring it met the legal obligations for all Bolton Textiles Ltd employees.

However, Mrs Y's pension scheme, Nest, wrote to her in December 2018 to say that it was reporting BTGL to The Pensions Regulator (TPR) because it had not paid contributions for the period 31 August 2018 to 6 September 2018, even though it had been sent several reminders.

Mrs Y subsequently questioned BTGL about the missing contributions, and whilst it informed her that this would be rectified, she later received further letters to the same effect from Nest in January, February, March, April and May of 2019.

She also made a further complaint to BTGL about the missing contributions but ,after receiving no response, brought the complaint to The Pensions Ombudsman in June 2019.

In November, BTGL responded to TPO’s request on the complaint, explaining that contributions had not been paid as the company did not make enough profit to accommodate pension payments, and promising that it would resolve the issue when its financial circumstances improve.

However, BTGL's response also included a number of derogatory comments about Mrs Y personally and about her employment, and TPO clarified whilst further attempts were made to resolve the matter informally with BTGL, these were unsuccessful.

In its decision, TPO also confirmed that the available evidence showed that BTGL failed to pay the correct contributions since September 2018, despite employee contributions continuing to be deducted from Mrs Y's salary from 19 September 2018 up to 3 May 2019.

The pensions ombudsman, Anthony Arter, concluded that there was "no doubt that maladministration has occurred and that BTGL has failed in its legal duties as an employer".

“BTGL could have resolved the situation when Mrs Y brought the matter to its attention as early as December 2018, but it actively decided not to do so," he continued.

"I have no doubt that BTGL’s inaction, in addition to its responses since the invitation of this complain, will have caused Mrs Y serious distress and inconvenience.”

As a result, BTGL has been ordered to pay Mrs Y £1,000 for serious distress and inconvenience.

It has also been ordered to produce a schedule showing the employee contributions deducted from Mrs Y’s salary that have not been remitted to Nest for each month of her employment and to pay the missing employer and employee contributions to Nest.

In addition to this, BTGL must establish with Nest whether the late payment of contributions has meant fewer units were purchased in Mrs Y’s Nest account than would have been bought if the contributions had been paid on time, and, if a unit shortfall is identified, meet the cost of correcting it.

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