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Pension security

Paying contributions on time

Normally your employer is responsible for deducting contributions from your salary and paying those and any contributions they make to your scheme or pot. There are rules that ensure that your employer does this efficiently.

Typically your employer is responsible for deducting contributions from your salary and paying those and any contributions they make to your scheme or pot. There are rules to make sure that your employer does this and within a reasonable amount of time.

Defined benefit or money purchase schemes

Your contributions

Your employer must pass your contributions to your scheme or provider by the 19th day of the month after they were deducted from your salary. This is also the case if you save for your pension using salary sacrifice.

If you have been automatically enrolled into a workplace pension scheme, there are special rules for the first deduction of contributions on automatic enrolment.

Click here to see more information about automatic enrolment

Employers may pay their contributions to the pension scheme on any date agreed with the scheme provider or trustees.

Your employer's contributions

Trustees of a defined benefit scheme must draw up and maintain a schedule of contributions. Trustees of a money purchase scheme must set up and maintain a payment schedule. These schedules record the contributions the employer pays to the scheme and when they pay them.

Personal or stakeholder pensions

If your employer pays contributions to your stakeholder pension or personal pension, they must pay these to the provider by a set date that they have agreed with the provider. If a payment is less than what was expected or is late, and the situation has not been sorted out within 90 days, your scheme or provider must report this to the Pensions Regulator. They must then tell you what has happened.

Click here to find out more about the Pensions Regulator.

If you have reason to be concerned about your pension contributions, speak to us on webchat or call 0300 123 1047 to talk to one of our team about next steps.

 

Frequently asked...

In a Defined Benefit pensions, what happens if the contributions are paid late or not at all?

If your employer does not pay your contributions to your scheme or provider in time, your scheme's trustees must report this to the Pensions Regulator. They would usually make a report when the contributions are 90 days late. They must then tell you what has happened.

My company who operated a defined contribution occupational pension scheme has become insolvent but the company failed to pay the company and employee contributions for 18 months before insolvency. How do we recover these contributions?

In this event a claim may be made to the National Insurance Fund by the insolvency practitioner for the missing employer and employee contributions due to the scheme in the 12 months leading up to the date of insolvency. For further information, you can obtain a copy of the explanatory leaflet (IL2 (REV 2)) regarding recovery of unpaid contributions from the Department for Business Innovation and Skills (BIS) on 0330 331 0020. For any contributions which fall outside this time limit, you and the other members of the scheme would become creditors of the employer.

My employer has not paid his contributions to our defined contribution company pension scheme for the last six months although the employee contributions deducted from our salaries have been paid into the scheme. What action can we take to force the employ

You should contact the scheme trustees to ask them if they have contacted the employer to find out why the employer's contributions have not been paid. You should also ask the scheme trustees if they have reported the non-payment of employer contributions to the Pensions Regulator. If not, you should ask them why they have not done this. Depending on the trustees response, you may want to discuss the situation with your employer.

My employer deducts my pension contributions each month but they seem to take an age to reach the insurer, and according to the pension statement from the insurer it seems to take about 60 days to reach my account. Are there any laws about timely payment

Contributions deducted from your salary should be paid to the pension provider by the 19th of the following month from which they were collected from pay or the 22nd of the following month if contributions are paid electronically to the pension provider. This requirement appears in the Pensions Act 1995 and it also features in the Pension Regulator’s code of practice.

Where can I find out more?

If you need more information, please contact us. A pension specialist from our team will be happy to help with whatever pensions-related question you have. Our help is always free.

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