One of the measures announced in the Autumn Statement was described as “pots for life” – a legal right for Defined Contribution (DC) savers to insist that new employers pay contributions into their existing schemes.
A Pensions Ombudsman case published last week appears to illustrate the potential challenges involved, both for employers and individual savers.
Miss N joined her new employer in 2018. The employer’s scheme provider was Nest, but Miss N asked the employer whether it would instead pay contributions into her Scottish Widows plan. The employer agreed.
However, it seems that payments were patchy, often late, and it was unclear what part of any of the payments remitted represented employee or employer contributions. Miss N left the employer in 2020, but the case has rumbled on until now, with both Miss N and the Ombudsman struggling to get information requested from the employer to calculate an appropriate resolution.
In its determination, the Ombudsman stated that the employer had shown a disregard of its responsibilities. It required the employer to:
- Pay Miss N £1,000 for the considerable distress and inconvenience it caused her
- Meet any cost in putting Miss N in the position she would have been had contributions been paid correctly and on time, and
- Pay Scottish Widows a reasonable administration fee for the work involved in calculating that cost.
Read the Ombudsman’s decision.
