Thousands of workers could be owed cash after big pension failure. Savers could be at risk of losing out on retirement cash due to a big pension failure, it has emerged, after employers didn’t invested their staff’spension contributions into their funds.
Steve Webb, former pensions minister and current partner at consultants LCP told The Sun: “Whilst automatic enrolment has been a huge success with over 10million more workers now saving into a pension, there is no doubt that there are thousands of cases when employers fail to comply with their legal duties.”
The Pensions Ombudsman (TPO) has upheld hundreds of complaints over the past few years where employers have failed to add their employee’s contributions to the scheme. Figures show since auto-enrolment started in 2012 the watchdog has issued over 400,000 “compliance notices”, and over 250,000 fixed penalty notices for non-compliance with auto-enrolment duties.
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Alice Haine, from Bestinvest by Evelyn Partners, the online investment service, said: “Discovering that your employer has failed to pay pension contributions into a workplace pension scheme will naturally be frustrating and extremely worrying for employees.
“This not only damages trust in an employer but also raises concerns about the effect the missing payments will have on pension savings.” She said: “Cases where an employer has deliberately failed to make pension contributions – perhaps to save money in tough economic times, such as during the Covid pandemic – or failed to enrol a staff member into a workplace pension scheme at all – are damaging not only to the employee but also the reputation of the employer.
“But human error can play a part in these cases as well, such as an employer miscalculating a worker’s pensionable salary, something that can result in underpayments.” Helen Morrissey, head of retirement analysis, Hargreaves Lansdown, has also echoed the calls.