Massively OT: Pension Conundrum

[Tordelbach]

Hi all,

I'm not actually aiming to create the most massively Off Topic thread yet, but I might get there nonetheless...  I've read the various work-related advice threads on here down through the years, and have come to value the advice of the Hive Mind.  So, the story of a pension gone awry is set before you for comment. You know where this is going, so bail out now...

I'm a Director on the Board of a rather unsuccessful archaeological company, with a 10% shareholding - not quite as good as being entirely my own boss, but getting there, as I'm the only actual archaeologist on the Board and thus have a large degree of operational control - unfortunately this doesn't extend into the arcane web of company finance.  

Two years ago, we set up a company pension scheme, and I signed the necessary forms for the money to be deducted from my wages.  

Now somewhat bizarrely, my 'payslip' is issued directly from the accountants, not through the  payroll - I was assured that this resulted in improved 'transparancy', in that Directors were not seen to be issuing salary cheques to themselves.

I assumed (obviously entirely foolishly) that the pension sum was deducted by the accountants before they issued me my paycheque, as I had requested.  And although I have NEVER received a statement of how my pension fund was doing, I was also verbally assured more than once that the agreed sums were going into it every month - this last bit at least was true.  Unortunately, it was going into my pension fund, but it wasn't coming out of my wages.  For two whole years.

Call me stupid (quite clearly I am), but I never noticed the discrepancy.  In my defence, neither did my normally eagle-eyed spouse-analogue, our financial director, our pensions advisor, our auditors or any of the three banks to whom I bared my financial all in pursuit of a mortgage.  Nor did my MD (the 60% shareholder), who it turns out us in precisely the same boat.

Now, this missing money having finally been spotted in the accounts, I'm being asked to pay back the full value of my contributions, about ?15K, no rush or anything, but hey, you owe us.  

Obviously I was not due this money (even tho' I work 20-30 hours unpaid overtime every week, but hey, perils of being the boss...), and you can see their point.  Now this MIGHT be okay, but for the fact that we bought our first house this time last year, spending every penny we owned and getting a monstrous mortage (?1300 a month for 31 years for a microscopic semi-d in a suburban wasteland which has been broken into twice, block put  through the kitchen window, car stolen from front door, cat run over by joyriders, etc. in just one year - hah!), and have spent every penny I've subsequently earned on putting in such decadent luxuries as floors and a bed etc.  We also have our first child on the way, due in May.  Or to put it it simply, I don't have ANY money, and I'm not going to be able to meet my mortgage AND pay the cash back.

So I think I'm going to figh it. I know this isn't a Robert-Maxwell-grade pensions fiasco, and I know my company has a strong case, but fuck it - if they (the overpaid financial manager and tame accountants) chose not to take the money out of my wages as per my written authorisation for TWO YEARS, why the fuck should I care?   Had they issued me proper payslips and statements on a regular basis, I might have had a chance to see the mismatch, but they didn't.

What makes this matter more irksome is that as a company Director I'm actually nominally resposnible for ensuring that company desn't make fuck-ups like this - but of course as a financial illiterate I was happy to naively delegate this sort of thing to designated and allegedly competent and qualified people.  It burns, my how it burns.

So now I seek the judgment of the Hive Mind.  Bestow your honey-like wisdom on my unworthy antennae.  

BTW,  I do appreciate that this but a minor woe compared to the hurts suffered my many on this board this past year, but as they say, its MY hill of beans.

(Oh, and I *am* going to seek the advice of my rather kooky solicitor before I do anything, but hey, you guys are cheaper...)

[The Enigmatic Dr X]

Have you explored suing the accountants?

If everything you say is correct, and they have been doing your payroll, and you have paid them for it, then you may be able to say they were negilgent and then claim on their professional indemnity insurance.

In the first instance speak to your solicitor, but then speak to the Institute of Chartered Accountants.

[The Enigmatic Dr X]

Second option is to investiagte a refund from the pensions company. This can be hard to get, but if they have never been in touch with you or the comapany then you could argue that it was not entitled to the money in the first place.

The point here is that you haven't got or taken the money. It's with the pension company. Your argument, therefore, is that they should pay it back.

Of course, that leaves you without a pension.

However, do you know for sure you have one? Have you seen pension statements? You should get one to your house every year.

Contact the pension provider direct and ask for a statement. That will let you know how much is in issue too, rather than taking your work/ possibly negligent accountant's word for it.

[Wake]

You said that the MD was in the same boat. Is he happy to pay back the company their overpayments?

In terms of how you might be able to afford to pay the money back, could you have the amount deducted from your pay for the next two years (this might be more affordable if you suspend contributing to your pension for the next two years)

Cheers,

Wake

[Tordelbach]

Sheesh lads, that's downright speedy of you.  Thanks mightily - as you can appreciate, I'm reluctant to discuss this in-house.  

I'm currently 'seeking clarfication' from the Pension Company as to what exactly is in the fund as I genuinely haven't received ANYTHING from them since the day I signed up (all I i know is that the prescribed amounts have been transferred from the company's account), and to be honest, I can see that I may end up just scrapping the pension and insisting that the money be refunded to the company directly (easy to say...), but on the other hand I'm 35, and it's bad enough that I only have two years contributions anyway without starting from scratch.

Suspending future payments while i pay the moolah back seems to amount to essentially the same thing, except that I won't have to enter a new scheme, but it's a very useful way of thinking about it.

I naturally like the idea of taking the accountants to task - it's not something I had thought of, frankly I was directing my ire at the company.  On the other hand, I quake at the knees at the thought of tackling accountants on a Proessional Indemnity issue, for reasons clarified below, but it does introduce at least the hint of pleasure into the proceedings...

As to the MD, a very affable and honourable but somewhat bumbling chap, he appears to be 'happy' to pay this back (he's over 60 and eyeing the pension hungrily, plus has other companies/angles to finagle into providing an income).  The problem is it was himself  that was personally handling the company's side of the scheme - when we get to the root of this, I suspect the key will turn out to be that he failed to instruct the accountants correctly, and thus may see 'coming clean' as the easiest way out of a sticky situation.  

Basically, no-one seems to think that I have much chance of holding on to the money though, eh?

Oddly enough none of our other co-directors chose to avail of the pension scheme, hanging onto personal pensions instead.  Babe in the woods, me...

Thanks again for the help, guys.

[WoD]

Tord - It sounds to me like you'll have to pay it back.  Can you arrange payment terms over a hopefully lengthy period?

[Wake]

Suspending future payments while i pay the moolah back seems to amount to essentially the same thing,

The advantage of suspending future payments rather than getting the pension company to refund the money is that your money will have earned two years of interest in the pension fund. It may depend on whether you want to continue with the same pension plan.

I very much doubt you can legally keep both the income you've had which should have been deducted and the pension fund you haven't been paying for. It might be possible to claim compensation from someone, but the easiest route might just be making sure you don't suffer while sorting it out.

Cheers,

Wake

[The Enigmatic Dr X]

The first thing to do is to track where the money is.

Only if it is an account in your name is there any issue about paying it back. If it is, then you have received the benefit of it and will need to repay it (watch out for it truly knackering  your tax returns). If it isn't in an account with your name on it, then ask why you should repay it?

The crucial point, as mentioned, is that the money IS somewhere. It hasn't been spent. No matter what, do not "repay" it without claiming ownership of the acutal money, wherever it is.

It may seem daft, but what you are being asked to do is not to repay something you have got but something you have been credited with, and there is a difference. There could well be a way to get out of this without actually putting your hand directly in your pocket - you would only need to do that if you wanted the pension.

And what are they worth nowadays anyway. eh?

[Matt Timson]

I was thinking kind of the same thing.

Unbelievably, at nearly 35, neither me nor Mrs Eyebrows have a pension- mainly because we firmly believe that when we come to retire, they'll be worth fuck all.

Of course, the beauty of this country is that should you try to invest in bricks and mortar (for example), or indeed do just about anything to avert the looming pensions timebomb, the fucking government will attempt to find a way to take 40% of it away from you.

Personally, I'm going to piss every penny up the wall now, while I can, and sponge off the state when I retire.  And pull the odd bank job.

[Queen Firey-Bou]

i'll even luckier.
nearly 40.
havent a pension, too busy trying to fund my debts.
and having been self employed & making a loss all my working life, have had an exemption from paying my stamp. which basically means no state pension either.

fantastic, i can look forward to being undervalued & over qualified in some pot-washing job until my death.

which, hopefully, will be soon, via the medium of puma wrestling.

tho knowing my luck, i'll not get put out of my misery, just loose an eyeball, have my pot-washing hand paraysled & catch hair-ball disease.

[Quirkafleeg]

Tordelbach... see email

[Oddboy]

My current plan for "future security" is hoping that one of my yet-to-be-conceived offspring will win the lottery, or possibly come into stupid amounts of money by hard work - whichever they fancy - just in time for my retirement.

[Art]

Invest all your money in a Bounty Hunting company - It's a sure bet!

[Conexus]

but don't invest your money in a movie about Bounty Hunting - invest your money in a movie about KitKat Hunting and you,ll get youm a far better return I'm sure