PO-117

PENSION SCHEMES ACT 1993, PART X

DETERMINATION BY THE PENSION OMBUDSMAN

Applicant / Mrs Rosemary Ajuwon
Scheme / T.R.U.S.T Ltd Registered Stakeholder Scheme (the Scheme) Membership Reference No:: F56887/10
Respondent / Thurrock Racial Unity Support Taskgroup Ltd (T.R.U.S.T. Ltd)

Subject

Mrs Ajuwon complains that her former employer T.R.U.S.T. Ltd failed to pay all of the employer’s contributions due into the Scheme.

The Pensions Ombudsman’s determination and short reasons

The complaint should be upheld against T.R.U.S.T. Ltd. It does not dispute the allegations made by Mrs Ajuwon.


DETAILED DETERMINATION

Material Facts

1.  Mrs Ajuwon joined T.R.U.S.T. Ltd on 1 August 2006.

2.  According to the “Terms Conditions of Service” which she signed, her original annual salary was £23,175 pa (plus £522 “Other Fringe Allowance”). It showed under the heading “Pension” that:

“6% of your annual salary will be paid to the Stakeholder pension providers, Friends Provident, or to an existing scheme of your choice.”

3.  Mrs Ajuwon joined the Scheme and received a “Regular contributions” certificate from Friends Life (formerly Friends Provident) showing that:

·  her start date in the Scheme was 18 December 2006;

·  T.R.U.S.T. Ltd would, as agreed with her, contribute 6% of her earnings (subject to change) into the Scheme; and

·  contributions would be invested 100% in the Managed Fund.

4.  Friends Life experienced problems dealing with T.R.U.S.T. Ltd over the years and notified the Pensions Regulator accordingly. It says that:

“At times we have received money but no schedules or schedules that did not balance with the money received. We have also received money for members who had not been added to the Scheme as we had not received application forms. At times this led us returning monies as it had been held for 30 days with no explanation from the employer.

Although Mrs Ajuwon joined in 2006, we do not always receive contributions for members under this contract. There is no requirement to necessarily pay contributions each month. Friends Life would not know whether contributions are due to any specific member.

At the end of 2011, the employer suddenly announced that contributions were overpaid because payments should never have been paid for one member. Until that issue was resolved, we were unable to report the employer on our regular 90 day report (which lists members, amounts etc) as it was not clear what was due to be paid, but we made the Pensions Regulator aware in the covering e-mail to which we attach our 90 day reports.”

5.  According to Friends Life’s records, T.R.U.S.T. Ltd paid contributions into the Scheme for Mrs Ajuwon as follows:

Date of Payment / Contribution Amount
23 June 2009 / £122.72
1 September 2009 / £122.72
6 May 2011 / £1,605.00
12 May 2011 / £548.55
12 May 2011 / £399.00
28 March 2012 / £3.15

The total contribution amount paid for the period 23 June 2009 to 28 March 2012 was £2,801.14. No contributions totalling approximately £4,000 were paid into the Scheme prior to 23 June 2009 by T.R.U.S.T. Ltd for Mrs Ajuwon.

6.  Mrs Ajuwon was made redundant by T.R.U.S.T. Ltd in March 2011.

Summary of Mrs Ajuwon’s position

7.  She is not prepared to wait indefinitely for T.R.U.S.T. Ltd to pay the missing contributions into the Scheme. She says that:

“…I am owed this pension money plus interest accrued and they should have reserved my pension payments and paid up long ago when they had the money…I have been fighting for so long now…this is really frustrating for me especially knowing that other employees in the T.R.U.S.T. Office have never been denied their pension payments.

Justice needs to prevail…I signed the contract that stated 6% will be paid by my employers into Friends Life.”

Summary of the position of T.R.U.S.T. Ltd

8.  No employer contributions were paid into the Scheme prior to 23 June 2009 for Mrs Ajuwon because of an administrative error on its part.

9.  It therefore accepts that it has underpaid contributions for her into the Scheme.

10.  It is not currently in a position to pay the missing contributions (with interest for late payment) into the Scheme because, as a charity, it has limited financial reserves. It is therefore finding it very difficult to obtain the money in order to put things right.

11.  It is committed, however, to make up the contribution shortfall as soon as its financial position has improved sufficiently.

12.  In 2011, Mrs Ajuwon rejected a compensation offer which it made to her in full and final settlement of her complaint when it had the financial resources, i.e. either:

·  a sum of approximately £2,000 (50% of the outstanding contributions); or

·  a monthly repayment of £100 over 40 months

Conclusions

13.  The complaint made by Mrs Ajuwon that T.R.U.S.T. Ltd failed to pay all of the contributions due to her into the Scheme is not disputed by her former employer and its failure to do so amounts to maladministration.

14.  T.R.U.S.T. Ltd says that it does not have currently have the funds to pay the shortfall in her contributions but promises to take the appropriate remedial action in the future as soon as it has adequate financial resources to do so.

15.  Nevertheless, the money is owed to Mrs Ajuwon and I make a direction below, enforceable in the County Court, that it should be paid.

16.  I uphold Mrs Ajuwon’s complaint.

Directions

17.  I direct that within 30 days of the date of this determination that T.R.U.S.T. Ltd shall:

·  provide Friends Life with full details of all the contributions (i.e. the amounts and their due dates) which it should have paid into the Plan for Mrs Ajuwon from 1 August 2006 until she was made redundant by T.R.U.S.T. Ltd in March 2011;

·  ask Friends Life to calculate the current fund value of the Scheme and also its notional value assuming that the unpaid contributions had been made when they fell due; and

·  within five days of being notified of the sum by Friends Life, pay the difference between the two values into the Scheme.

TONY KING

Pensions Ombudsman

11 April 2013

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