Auto-enrolmentJan 5 2017

Now: Pensions criticised for record mistake

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Now: Pensions criticised for record mistake

Now: Pensions has been told to compensate a client for failing to maintain proper records of his and his employer’s contributions.

The auto-enrolment provider has been told to pay a client, referred to as Mr S, £500 in recognition of the distress and inconvenience caused to him and pay him £34.40 for administration fees and investment loss.

Mr S was unhappy with the incorrect and inconsistent valuation of his pension fund. 

It did not reflect his contributions and those of his employer, the combined total of which were in excess of £800. 

Mr S was initially employed on a temporary 18 month contract as a project manager and became a member of the Now: Pensions scheme. 

His position was made permanent at the end of the temporary contract on 26 February 2016. 

When his position was made permanent Mr S informed his employer he wanted to transfer his funds to a self-invested personal pension with an alternative provider. 

In March 2016, Now: Pensions sent Mr S a pension benefits statement. 

The statement gave Mr S an estimate of his fund value as at 31 March 2015 of £121.44. 

However, Mr S’ payslip for April 2015, showed the combined employer and employee contributions to be greater, £205.80. 

Mr S questioned the figures with Now: Pensions and asked it to expedite the transfer of his funds to his Sipp. 

Explaining the reasons behind the discrepancy in the figures, Now: Pensions said: “We are aware that there are issues with up to date information presenting on our systems, however, I can assure you this is no fault of your employer, this is due to the data being transmitted between the payrolls systems and the pension system. 

“We have, with the help of your employer, identified this issue and are working to resolve this as soon as possible.”

Mr S raised a formal complaint with Now: Pensions by email on 2 April 2016. 

He said the valuation was inconsistent with the contributions made in previous years, which totalled more than £800. 

On 11 April 2016, Now: Pensions wrote to Mr S and informed him that since his employer had not updated the leaving date on his records, the transfer could not proceed. 

Now: Pensions also confirmed that the figure stated on the transfer quotation was not guaranteed and did not take into account the missing contributions. 

Following this, Mr S contacted Now: Pensions on several occasions and as he did not receive any acknowledgements or responses, he raised further complaints. 

On 4 May 2016, Now: Pensions informed Mr S that the total combined value of the employee and employer contributions amounted to £804.92. 

Mr S completed the necessary transfer form the next day and returned it to Now: Pensions. 

Mr S then contacted Now: Pensions on 13 May 2016 and enquired about timescales for processing the paperwork and completing the transfer. 

Now: Pensions did not respond to Mr S but the transfer was eventually finalised on 13 June 2016. 

Now: Pensions responded to Mr S on 28 July 2016 and apologised for the distress and inconvenience caused by the issues, offering him £100.

The auto-enrolment provider said the quality of service provided had fallen short of the level of service it would normally provide and it was working with all parties to correct member contribution records.

The provider added recent initiatives had been put in place which resulted in a significant improvement and it acknowledged that the transfer value had reduced from £806.92 to around £770.52. 

On 3 August 2016, clarified the transfer value had been reduced as £20 had been deducted for administration charges and there was a further loss of £15 due to investment loss.

The provider then increased the original offer of £100 compensation to £250. 

When Mr S asked for his complaint to be considered again Now: Pensions said he should bring his case to the ombudsman.

Now: Pensions told the ombudsman it was Mr S’ employer’s fault for “delinquent record-keeping”. 

Anthony Arter, pensions ombudsman, said while the administration of pension schemes is the ‘everyday job’ of Now: Pensions and JLT.  

Mr Arter said: “Given the circumstances of this case and the numerous opportunities Now: Pensions and JLT had to treat Mr S with better care and attention, the level of distress and inconvenience suffered by Mr S cannot be said to be inconsequential. 

“I consider £500 compensation is warranted.”

Now: Pensions requested to be held responsible in respect of any failings in this matter by JLT. 

emma.hughes@ft.com