TPO upholds complaint against employer for unpaid pension contributions

The Pensions Ombudsman (TPO) has upheld a complaint against Key Security UK Ltd for failing to pay contributions into a worker’s pension due to maladministration.

Key Security UK Ltd was ordered to pay £1,268.77 into the scheme and to ensure that the complainant, Mr E, was not financially disadvantaged by its maladministration by arranging for any investment loss to be calculated and paid back into the scheme.

In addition to this, the employer was ordered to pay Mr E an additional £1,000 for the serious distress and inconvenience caused.

Mr E complained that, despite deducting contributions from his pay, the employer failed to pay them into the scheme.

On May 2023, Mr E complained to the employer that he had not received details of his pension account, to which the employer paid £262.40 into the scheme on 7 July 2023.

The complaint was brought to TPO on 2 October 2023 and the employer paid two contributions into the scheme.

On 9 November 2023, TPO asked the employer for its formal response to Mr E’s complaint, to which the employer responded that the outstanding contributions would be repaid by 29 February 2024, in accordance with a deadline set by The Pensions Regulator (TPR).

The employer also said it was working to a repayment date for the missing contributions of March 2024, as set by TPR.

On 19 February 2024, the employer provided TPO with a letter from TPR dated 25 August 2023 showing that all pension contributions were to be paid by 18 March 2024.

On the same day, the employer told TPO that TPR’s repayment date would change, but no further evidence was provided about the change in repayment date.

The employer then paid a further £223.73 into the scheme on 20 February 2024, but the employer did not provide any evidence to TPO regarding outstanding contributions.

On 27 March 2024, Mr E provided evidence to demonstrate that there had been no further payments paid into the scheme since 20 February 2024.

With the four payments made to the scheme deducted, the total contributions owed by the employer was £1,853.52.

This case was then passed to the adjudicator who said that Mr E was not in the financial position he ought to be in and while the employer had on occasion responded to TPO’s communications it had not done so cooperatively.

The adjudicator believed an award of £500 for non-financial injustice was appropriate.

The employer disagreed with the adjudicator's opinion and said it could not pay back the entire backlog of pension contributions to the scheme in 21 days due to the way the scheme administrator accepts payments and a lack of cash flow.

The employer also contested the non-financial injustice award for £500 as it was not consistent with an award of £1,000 made in a previous determination, it also provided evidence of payments after the 20 February 2024.

It stated that Mr E had been reassured on multiple occasions, confirmed by payments made to the plan since making his complaint.

The case was then passed over to the deputy ombudsman, Anthony Arter, who agreed with the adjudicator's opinion except for the level of award for maladministration.

In his decision, Arter, said: “Mr E has complained that the employer has not paid all the contributions due to his plan account.

“It is clear from the evidence provided that the employer has failed to pay all of Mr E’s outstanding contributions into the plan.

“On this basis, I agree with the adjudicator’s decision to accept this complaint for formal investigation.

“The employer’s failure to pay employee and employer contributions into the plan amounts to unjust enrichment and has caused Mr E to suffer a financial loss. The employer shall take remedial action to put this right.

“In consideration of the events in this case, I find that Mr E is entitled to a distress and inconvenience award in respect of the serious ongoing non-financial injustice which he has suffered.

“This was exacerbated by the employer’s continuing failure to resolve the dispute during TPO’s investigation into Mr E’s complaint.

“It is my view, that an award of £1,000 is a more appropriate figure for the non-financial injustice Mr E has suffered.”



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