Pension Scheme Disputes
Issues arising with your pension that you have worked so hard for aren’t uncommon. Disputes can affect various parties, including employers, trustees, pension professionals, members, insurers and industry bodies.
Disputes can arise across different types of pensions, such as personal pensions, private pensions, workplace pensions, or public service pensions. Pension providers might make mistakes or their rules could be unclear leading to confusion and disputes.
When you have problems with your pension, the first step is seeking help from the Pensions Ombudsman. In some cases, it may be appropriate to seek compensation.
When things go wrong your rights are protected by strict rules enforced by regulatory bodies. At Lawhive, our network of specialist employment lawyers is on hand to support you with your pension scheme dispute.
Contact us to find out more.
What is a pension scheme dispute?
A pension scheme dispute is a legal dispute between an employer and an employee over the terms of the employee's pension scheme. Solicitors can help resolve these disputes and ensure that employees receive the pension they are entitled to.
What are the common causes of pension disputes?
Common causes of pension disputes include claims regarding the administration and management of pension schemes and cases of pension misselling, where the pension sold doesn't suit the employee's needs or they weren't warned about potential risks.
Additionally, disputes may also come up if a pension provider becomes insolvent.
Who can help me resolve a pension scheme dispute?
If your complaint is directed at how your pension scheme is being run, you can contact the company that runs your particular scheme, or your financial adviser. If their response is not satisfactory, you can contact the Pensions Ombudsman.
If your pension provider has gone out of business you may want to make a claim to the Financial Services Compensation Scheme (FSCS).
State pension claims can be referred to The Pension Service. If you’re unhappy with their response you can escalate your complaint to a senior manager, and appeal to the Independent Case Examiner.
If your issue is related to National Insurance contributions you can complain to HMRC.
Do I need a solicitor for a pension dispute?
There’s no legal requirement to appoint a solicitor in a pension dispute. However, when you have a dispute with your pension provider or employer, an expert pension scheme dispute lawyer can help you resolve it quickly.
Attempting to resolve a pension issue yourself can be time-consuming due to the complexity of pension schemes.
You’re relying on your pension for your retirement, so it’s best to be secure in the knowledge that you’re getting what you’re owed by your pension provider and the state.
What is the role of the Pensions Ombudsman in resolving disputes?
The Pensions Ombudsman is the UK’s pensions regulator. They are an independent organisation set up to deal with pension complaints.
When you have a pension dispute you can’t resolve you can refer it to the Ombudsman.
If you think your pension scheme is being badly run, or was missold to you, the Ombudsman will investigate.
You can contact them if you have a complaint about a decision made by The Pension Protection Fund or the Financial Assistance Scheme.
Can I appeal a decision made by the Pensions Ombudsman?
Yes, you can appeal a decision made by the Pensions Ombudsman, but you’ll have to do so within 35 days from the date of the decision.
It is a statutory right and you don’t need the consent of the ombudsman to appeal a decision they have made.
If you want to appeal a decision you will have to take it to the high court. A solicitor can help you understand the best course of action to take in this situation, taking into account the specifics of your case.
How long does it take to resolve a pension dispute?
How long a pension dispute will take to resolve depends on the governing body you are in dispute with and the procedures they have in place.
Governing bodies must have an internal dispute resolution procedure. A decision is typically made within four months. When a decision has been made, the applicant should be informed no more than 15 days after the decision date.
If you are not satisfied with the decision, you have six months from the date you were informed of the decision to appeal.
How long a dispute will take to resolve in practice is hard to estimate. It will depend on the specific circumstances of your case and its complexity. These timeframes are guidelines only. If you’re in dispute with your provider, follow the advice of a solicitor.
What are my rights regarding pension contributions?
When you’re eligible for a pension scheme, your employer must set you up on one automatically. Both you and your employer will make contributions.
The amount you and your employer will contribute depends on the type of scheme you are enrolled in.
In a defined contribution scheme, you must contribute a percentage of your salary, your employer will also contribute, and you receive tax relief.
In a defined benefit scheme, contributions vary on the scheme’s rules. Your employer can pay more than the legal minimum if they choose.
The minimum total contribution, comprised of your and your employer’s contribution is 8% of qualifying earnings, typically between £6,240 and £50,270 before tax.
Tax relief means the Government adds money to your pension. Everyone is entitled to this, even if they don’t pay income tax.
For any voluntary schemes you join, your employer has to contribute when you earn more than:
£520 a month
£120 a week
£480 across 4 weeks
Personal contributions allow individuals to contribute to a range of pension plans. The self-employed and others can contribute unlimited amounts, however, there are limits on annual gross contributions.
Can I dispute pension contributions made by my employer?
If you have concerns that pension contributions by your employer are wrong, you should start by contacting them. If contributions haven’t been paid, find out why not, and if and when they’ll correct the error.
When disputing pension contributions made by your employer it is best to put any communication in writing in case you later need to refer to it in court.
If your employer’s response is not satisfactory you can refer your case to the Pensions Ombudsman. They can help with occupational pension schemes and personal pension plans.
To complain to the ombudsman, you’ll need to make an application and provide supporting documents.
If your pension contributions haven’t been paid after 90 days, and your employer has been reported, a complaint can be raised with The Pensions Regulator. You’ll need to have the following to hand:
Do I need to pay tax on pension dispute settlements?
If you are paid compensation after a dispute with your pension provider you may have to pay tax on any settlement you were awarded. While you usually won’t be taxed on the full amount, it may be that some of your pension compensation is taxable.
A settlement can be tax-exempt when your pension was mis-sold to you.
This is the case when you fulfill the following criteria:
You opted out of your employer’s pension scheme to use a personal pension scheme
You did this based on bad advice
This happened between 29th April 1988 – 305h June 1994
How can Lawhive help?
We know it can be unnerving when there is a problem with your pension, especially when you are relying on it for your day-to-day living expenses.
Our network of empathetic pension solicitors is experienced in all areas of pension law and can discuss the strength of your case and next steps with you to get the best outcome. They can also support you with claims to the Pensions Ombudsman and member complaints under a scheme’s internal dispute resolution procedure.
To find out more, contact us today for a free case evaluation and quote for the services of a specialist lawyer.