TPO upholds failure to pay complaint against IVI Metallics

The Pensions Ombudsman (TPO) has upheld a failure to pay into scheme complaint against IVI Metallics Ltd, with the applicants awarded £1,000 each for the serious distress and inconvenience caused.

IVI Metallics was ordered to pay in the unpaid contributions to the scheme, and calculate any loss of investment gains and make up the calculated shortfall.

A total of five applicants raised the complaint with TPO, after realising that their employer had not paid their pension contributions into the scheme, despite having been automatically enrolled in August 2016.

Between 2017 and 2018, the applicants noticed that contributions had been deducted from their monthly salary, but had not been paid into their pension scheme, prompting one complainant, Mr L, to raise a ‘collective grievance” and contact TPO’s office.

In late 2018, the applicants noticed that monthly contributions had again been deducted from their pay and not been paid into the plan.

IVI Metallics explained in February 2019 that it had been acquired by Vulcan Industries, stating that there had been a “lack of payments to the pension provider over the last few months”, as the company had dealt with “stretched cashflow” and “financial changes”.

TPO was then contacted in relation to the missing payments in March 2019, with the ombudsman liaising with the employer between March and November 2019 in connection with the missing contributions.

IVI Metallics said that it had recommenced payments and made additional payments to the pension scheme, however, explaining that sales over the past year were affected by the global global pandemic and Brexit, with a focus placed on retaining staff amid this.

However, the additional payments did not bring all contributions up to date, and whilst the scheme stated that it had now turned its attention to making good the missing pension contributions by making multiple payments each month, it confirmed it would not be in a financial position to compensate staff for the fact that the contributions were paid late.

Despite this, TPO’s adjudicator concluded that the employer’s duties remained unchanged despite events outside of its control, and that the failure to pay the contributions to the plan constituted maladministration.

While the employer accepted the adjudicator’s opinion, it failed to put matters right, stating that it could not make the outstanding contribution payments or any loss of investment return within the 14 recommended days.

In his decision, however, pensions ombudsman, Anthony Arter, agreed these factors, while outside of the company's control, do not negate its obligations to remit pension contributions to the scheme, concluding that the failure to pay the contributions amounts to "unjust enrichment".

In light of this, TPO has ordered the employer to pay £1,000 to each applicant in recognition of the serious distress and inconvenience caused, as well as paying the unpaid contributions to the scheme.

The scheme has also been requested to calculate any loss of investment gains from the due date of each contribution to the date of actual payment, with IVI Metallics then expected to make a payment to remedy this loss and any administration fees.

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