B&CE and building company botch pensions complaint

Mr Y, a member of the the Halsey (Builders) Ltd Pension Scheme, saw his complaint against B&CE — the provider of The People’s Pension — and Halsey upheld by the ombudsman.

Besides missing payments, incorrect contributions were also made to his pension, while B&CE failed to notify Mr Y nor did it report the matter to the Pensions Regulator.

Halsey and B&CE have been ordered to pay into Mr Y’s pension to make up for his lost contributions, while he has also been compensated £500 for his distress over the issue.

Despite many requests and promises of a response, the employer had consistently failed to provide accurate information required for B&CE to carry out the loss calculation to a satisfactory level

Anthony Arter, Pensions Ombudsman

A year’s worth of contributions missing

Mr Y began working for Halsey in 2015. He opted out of the scheme — at which time B&CE also acted as a trustee for — before deciding to re-enrol the same year.

In February 2016, he told the employer: “I have been requesting since the week beginning November 23 2015 for you to opt me back into [the scheme] and you have still not done so.”

Mr Y told Halsey that he had contacted B&CE. “I understand that the payments can be backdated to the date I requested to rejoin, but it is now 12 weeks since I asked to rejoin and the longer this goes on the larger the payment will get that will be taken out of my wages in one lump sum,” he continued.

“[B&CE] also advised me that this process should not take this long, that I should not have to make multiple requests to you to do this, and that after waiting this long my next course action [sic] would be to contact TPR.”

Mr Y then discovered in June 2018 that Halsey had not paid around a year’s worth of employer and employee contributions into his scheme. It also became apparent that from April 2018, Halsey had been deducting and paying the wrong employee and employer contributions.

Feeling that Halsey had ignored his appeals to resolve the matter, Mr Y contacted The Pensions Advisory Service’s dispute resolution team, which by then had become part of the Pensions Ombudsman.

Wrong re-enrolment date

In July and August of 2018, the ombudsman’s team communicated with Mr Y and his employer, with the latter beginning to pay correct amounts as a result. Halsey, however, then made later mistakes. Mr Y informed his employer of the errors, but these were not corrected.

B&CE subsequently confirmed that Mr Y had been re-enrolled into the scheme in March 2018, instead of March 2016.

In February 2019, Mr Y emailed B&CE asking the provider to confirm as soon as possible that no payments had been made into his pension since December 5 2018, and that there were no payments scheduled to be made. 

“My employer has not been making contributions and [it] was given until January 31 2019 to make the missing payments by the Pensions Ombudsman before it goes to litigation, so could you also please confirm that payments show on the account on the day that they are paid to you,” he wrote. 

“Could you also please send me how much my employer and myself have each paid in since I was opted back in March 24 2016.”

Halsey confirmed in February 2019 that all contributions to January 17 2019 had been paid to B&CE, but were still to be allocated.

However, Mr Y identified that payments were being taken from his net pay, instead of gross pay. B&CE would therefore need to add tax relief, but had not done so.

In November 2019, he complained to Halsey that it had stopped paying his contributions for a year, and while it had agreed that he should receive compensation for the interest lost, this compensation had not been paid.

He also complained that B&CE’s systems had not identified the lost contributions, and had not received information that B&CE claimed to have sent in 2018 and 2019.

His final complaint regarded the provider’s advice to the employer on finding that he had not been re-enrolled into the scheme in 2016, which was to put it through as an auto-enrolment dated March 2018. This made his record incorrect and masked the non-payment of contributions deducted from his wages, he argued.

Consistent failures to provide information

In April 2020, the ombudsman asked Halsey and B&CE for formal responses to Mr Y’s complaint. Mr Y eventually left employment in July 2020.

In the same month, he noticed that B&CE’s compensation calculation covered only the period from April 2018 to January 2019, and not the period in which payments were withheld — therefore not paying him everything he was owed. 

Mr Y was also displeased that the letter had been given to him at the end of his last day of working, which left him no time to read it properly.

In October 2021, B&CE said it had received what it believed was a full breakdown of contribution amounts for Mr Y from Halsey, but it was subsequently concluded that this information was incomplete.

In December 2021, it said that numerous attempts to secure requested information were met with claims that these details would be provided imminently, yet no information was provided.

In a judgment dated June 22 2022, Pensions Ombudsman Anthony Arter observed: “Despite many requests and promises of a response, the employer had consistently failed to provide accurate information required for B&CE to carry out the loss calculation to a satisfactory level. This failure amounted to maladministration.”

He said that B&CE has confirmed that it had still not received necessary information over March to June 2022. As of the date of the ruling, this information was 12 weeks overdue.

Arter added that Halsey had failed to reply to its own requests in a timely manner.

The ombudsman awarded a further £500, to be paid by Halsey, on top of the £1,500 already paid to him over the distress his employer had caused him.

Halsey must also provide all necessary information to B&CE within 28 days of the ruling, in order for B&CE to conduct a full loss/gain calculation, which Mr Y must see and agree to.

“If the calculation shows a loss, then within a further 28 days the employer and B&CE shall between them pay into Mr Y’s pension account the sum required to bring his unit holding to the correct level in such proportion as they reasonably agree between them,” Arter said.

“If the calculation shows a gain no further action is required.”

A B&CE spokesperson said: “This was not a straightforward matter, as an opted-out employee had opted back in without the provider being advised.

“We agreed with the adjudicator’s findings in relation to tightening up procedures where this arises, paid the compensation awarded to the employee and, once we have the necessary information from the employer, will carry out a full loss/gain calculation within the agreed timescale to enable the funds to be paid to the member’s account.”