Royal London Pension Plan · CAS-84901-D5F7

CAS-84901-D5F7

Ombudsman’s Determination Applicant Mr Y

Plan Royal London Pension Plan (the Plan)

Respondent M & G Olympic Products Limited (the Employer)

Outcome

Complaint summary Mr Y has complained that the Employer, despite deducting contributions from his pay, has failed to pay them into the Plan.

Mr Y has said that the missing contributions amounted to £1,433.25.

Background information, including submissions from the parties On 8 May 2012, Mr Y commenced employment with the Employer.

On 1 January 2019, Mr Y became a member of the Plan. At first, contributions were paid into the Plan on time.

From July 2020, contributions began to be paid late.

In December 2020, the November 2020 employee contribution was paid into the Plan, but the corresponding employer contribution was not paid.

From December 2020, contributions were deducted from Mr Y’s wages, however nothing further was paid into the Plan.

In May 2021, the Employer verbally advised its employees, at a staff meeting, that contributions will be bought up to date by the end of July 2021.

1 CAS-84901-D5F7 On 23 July 2021, a contribution was remitted into the Plan. This was the employer contribution that was shown on the November 2020 payslip.

On 13 September 2021, the Employer was chased for an update on the outstanding contributions.

The next day, the Employer responded and stated that the business had suffered from poor management of client accounts and cash flow and it had taken steps to limit the impact on the business. It said the choice was between paying wages and pension contributions or making people redundant. The Employer also stated that the outstanding contributions were the highest priority and that a payment plan was being worked on with the pension authorities. Mr Y says that, despite this assurance by the Employer, the outstanding contributions remained unpaid.

On 4 February 2022, Mr Y left the Plan in order to stop further pensions contributions being deducted from his wages.

On 1 March 2022, Mr Y submitted a complaint to The Pensions Ombudsman (TPO).

Mr Y provided copies of some payslips he held which detailed the pension contributions deducted from his pay and the corresponding employer contributions and pay information for the period from 1 December 2020 to 4 February 2022. The contributions amounted to £1,433.25. A breakdown of the deductions has been included in the Appendix.

On 29 April 2022, Mr Y was made redundant.

On 21 June 2022, the Employer advised TPO that it is in the process of evaluating the company in order to ascertain the best steps to take going forward. It stated that it is unlikely the business will be able to continue trading.

On 24 June 2022, Mr Y received a statement from Royal London, the Plan administrator. This confirmed the last payment made into the Plan was on 23 July 2021 for £58.05. This was the employee contribution for November 2020.

On 3 August 2022, Royal London provided TPO with a breakdown of all the payments it has received from the Employer in relation to My Y’s Plan account.

2 CAS-84901-D5F7 Caseworker’s Opinion

• The Caseworker stated that TPO’s normal approach, in cases such as these, was to seek agreement from all parties on the facts of the complaint, including the dates and amounts of contributions involved. She said that, as the Employer had not confirmed the amount of contributions that were outstanding, she had to base her Opinion solely on the information provided by Mr Y.

• The Caseworker said that she had no reason to doubt the information provided by Mr Y. So, in the Caseworker’s Opinion, on the balance of probabilities, contributions had been deducted from Mr Y’s salary, that had not been paid into the Plan. In addition, the Employer had not paid any of the employer contributions that were due over the same period. As a result of its maladministration, Mr Y was not in the financial position he ought to be in.

• In the Caseworker’s view, Mr Y had suffered serious distress and inconvenience due to the Employer’s maladministration. In the Caseworker’s opinion an award of £1,000 for non-financial injustice was appropriate in the circumstances.

Ombudsman’s decision

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Directions

(i) pay Mr Y £1,000 for the serious distress and inconvenience he has experienced;

(ii) produce a schedule (the Schedule) showing the employee contributions

(iii) forward the Schedule to Mr Y.

(i) pay the missing contributions to the Plan;

(ii) establish with Royal London whether the late payment of contributions has meant

(iii) pay any reasonable administration fee should Royal London charge a fee for carrying out the above calculation.

4 CAS-84901-D5F7 Within 14 days of receiving confirmation from Royal London of any shortfall in Mr Y’s units, pay the cost of purchasing any additional units required to make up the shortfall.

Anthony Arter

Pensions Ombudsman 30 November 2022

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Appendix Date Employee Employer Paid Date paid contributions contributions

1 April 2020 to 30 April 2020 £71.49 £53.60 Yes 1 May 2020 1 May 2020 to 31 May 2020 £56.12 £42.08 Yes 5 June 2020 1 June 2020 to 30 June 2020 £57.57 £43.17 Yes 2 July 2020 1 July 2020 to 31 July 2020 £70.15 £52.60 Paid late 18 September 2020 1 August 2020 to 31 August 2020 £56.12 £42.08 Paid late 25 September 2020 1 September 2020 to 30 September 2020 £72.32 £54.24 Paid late 18 December 2020 1 October 2020 to 31 October 2020 £59.74 £44.80 Paid late 23 December 2020 1 November 2020 to 30 November 2020 £58.05 £43.54 Employer contributions not paid 23 July 2021

Contributions due for 2020/21 £724.20 £543.15 Based on payslips and P60 Contributions paid for 2020/21 £501.56 £332.57 Yes Contributions not paid for 2020/21 £222.64 £210.58 No Contributions due for 2021/22 £571.43 £428.60 No Contributions not paid for 2021/22 £571.43 £428.60 March 2021 payslip year to date Total unpaid contributions £794.07 £639.18