Previous employer still making pension contributions

[bonzos]

Hi folks, I worked for a large multi national company for a number of years and there was an arrangement in place that if the employee made a contribution of up to 5% of his wages towards a private pension the employer would match it. I left the company almost a year ago but received a statement from the pension provider for 2015 which showed the company is still contributing its 5% and my 5%!? I am aware that I need to let them know about this but am concerned that they will look for the money back as I am not in a position to repay it due to very demanding financial circumstances I find my self in currently. What is the best approach to resolve this issue and I right in thinking that the money cannot be recovered from the pension?

 

[Branz]

and am I right in thinking that the money cannot be recovered from the pension?

I believe it can be recovered from the pension fund as it is clearly an error.

Even if you had the mula the 10% is gross and I doubt if the revenue would allow you the necessary tax relief.

I would advise the pension fund provider and let them sort it out.

 

[Clamball]

Of course let them know. I am not sure how easy it will be for them to get their money back from a pension scheme. Once it goes in it is supposed to remain untouched until retirement. But there probably are provisions for errors like this. Since you do not have the money you should not be required to pay them back but offer to do everything necessary for them to get it back from the pension provider (sign documents etc).

 

[Steven Barrett]

Like Branz said, just tell your former employer of the error and let them sort it out with the pension provider. The pension company will make your policy "paid up" from the date you left and refund the overpaid contributions.

You won't be asked to pay it back.



Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

 

[Gordon Gekko]

As others have pointed out, you won't have to repay this directly. It should be possible to repay it from the pension fund. However, you should know that the contributions are likely to have fallen in value quite significantly. If it was me, I would be strongly of the view that my fund should not suffer as a result of the incompetence of others. If the value of the erroneous contributions has fallen by 10% in the interim, you should not suffer as result by having your fund repaying 100% of the contributions' original value.

 

[Cervelo]

As others have pointed out, you won't have to repay this directly. It should be possible to repay it from the pension fund. However, you should know that the contributions are likely to have fallen in value quite significantly. If it was me, I would be strongly of the view that my fund should not suffer as a result of the incompetence of others. If the value of the erroneous contributions has fallen by 10% in the interim, you should not suffer as result by having your fund repaying 100% of the contributions' value.

I would agree that the value paid back is the current value and not the initial contribution after all it was there mistake and you only found out from your annual statement and you did not gain by it

 

[Steven Barrett]

As others have pointed out, you won't have to repay this directly. It should be possible to repay it from the pension fund. However, you should know that the contributions are likely to have fallen in value quite significantly. If it was me, I would be strongly of the view that my fund should not suffer as a result of the incompetence of others. If the value of the erroneous contributions has fallen by 10% in the interim, you should not suffer as result by having your fund repaying 100% of the contributions' original value.

I've never come across that happening. In a case where it has gone on for so long and the values have fallen, the life company will give a refund of the value of the overpaid premiums.

You also have to remember, these policies are held in trust for the members benefit. The trustees have real duties (although a lot of them forget they have) to protect the members of the scheme. If an employer took funds from a member to correct a mistake they made, it is the trustee's duty to protect the members pension fund. Can't see it happening but no harm in being aware.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

 

[Gordon Gekko]

I've never come across that happening. In a case where it has gone on for so long and the values have fallen, the life company will give a refund of the value of the overpaid premiums.

You also have to remember, these policies are held in trust for the members benefit. The trustees have real duties (although a lot of them forget they have) to protect the members of the scheme. If an employer took funds from a member to correct a mistake they made, it is the trustee's duty to protect the members pension fund. Can't see it happening but no harm in being aware.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

That would be crazy. As markets have fallen, the innocent member is getting hammered for the mistakes of others. They should only be refunded the current value of the contributions.

 

[Steven Barrett]

That would be crazy. As markets have fallen, the innocent member is getting hammered for the mistakes of others. They should only be refunded the current value of the contributions.

I'm agreeing with you Gordon. The OP won't suffer financially in any way from this. It is the trustee's duty to ensure it doesn't happen to.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

 

[Seagull]

The excess contributions will be reversed, as if they had never happened, rather than the incorrect overpayment being removed from the current value. At any rate, that's what should happen.