Non-payment of contributions – The case study of Mrs E

Mrs E’s employer auto-enrolled her into an account with National Employment Savings Trust (NEST) in March 2018.

Sometime after that, Mrs E checked her account and noticed that contributions had not been made. She approached her employer, asking for the missing contributions to be made and in October 2018, Mrs E’s employer paid £104 to her NEST account in respect of unpaid contributions.

However, Mrs E said that was less than half the contributions due. Mrs E’s employer maintained that the outstanding contributions had been made. NEST said there were outstanding contributions going back to July 2018.

Mrs E later confirmed that most of the missing contributions had since been made. However, there were unexplained deductions from her NEST account, and she had been unable to verify that all contributions had been paid, as her employer had failed to provide payslips.

Mrs E’s complaint was considered by an Adjudicator. The Adjudicator’s Opinion was that the complaint could be upheld, and the employer should first notify NEST of any outstanding contributions to Mrs E’s NEST account and confirm the dates they should have been invested. Secondly, confirm that contributions to Mrs E’s NEST account were correct; and request a loss calculation to ascertain whether Mrs E had suffered investment loss on account of delayed payment of contributions. Finally, the employer should pay Mrs E £1,000 for the serious distress and inconvenience caused.

Mrs E accepted the Adjudicator’s Opinion but the employer did not. Although it agreed to pay Mrs E redress in line with a loss calculation provided by NEST, it did not agree that it should pay £1,000 for the serious distress and inconvenience because it was a small company dealing with large demands in difficult economic times. In its view, an award of £1,000 was inappropriate, especially as the value of Mrs E’s benefits with NEST were worth only £1,275.

The Deputy Ombudsman upheld the complaint and directed the employer to take the actions outlined in the Adjudicator’s Opinion in relation to notifying NEST of any outstanding contributions, confirming the dates they should have been invested and to pay Mrs E redress for investment loss in line with NEST’s calculation.

However, in relation to the award for distress and inconvenience the Deputy Ombudsman concluded that, although problems had occurred on several occasions which the employer had been slow to put right, it was not a particularly complex issue to resolve. She said awards for distress and inconvenience are not intended to be punitive and she was satisfied that in this case there had been no lasting effect on Mrs E’s pension pay and directed that the employer pay Mrs E £500 to recognise the significant distress and inconvenience caused.  

Related determinations

• National Employment Savings Trust (PO-24238)