Employer deducted my wages

Paulbut2000

Hey folks,

Last week I left my job for a new one. In my old job I was in their pension scheme but was only in it for one and a half years.

So when I rang the pension company to say I was leaving they said one option was to receive a refund less tax of my contributions and so would my old employer.

They rang me a day later to say that because when I joined the pension scheme I also transferred over a lump sum from a previous pension scheme that I had been in for 3 years. So it works out that those 3 years count along with my 1.5 years with my old employer. This means I am over the 2 years so I don't get my contributions back which is fine .

The problem is the pension company will also not refund my old employer so I take their contributions with me but now my old employer is trying to deduct this sum from the wages they owe me.

Are they allowed to do this?

No Pants

Why would they be deducting your pension contributions?

Paulbut2000

No Pants wrote: »

Why would they be deducting your pension contributions?

They say because they cannot get their contributions back from the pension company they will have to deduct it from my wages. It makes no sense to me either.

They would have been entitled to get their contributions back if I didn't transfer a lump sum from a previous employer into their pension scheme.

No Pants

Paulbut2000 wrote: »

They say because they cannot get their contributions back from the pension company they will have to deduct it from my wages. It makes no sense to me either.

They would have been entitled to get their contributions back if I didn't transfer a lump sum from a previous employer into their pension scheme.

I'm still unclear on why they would be taking them back at all. Pension payments are usually a part of your contracted salary. Is there a clause in your contract that says that they can do this if you don't stay there a defined length of time or something?

Paulbut2000

No Pants wrote: »

I'm still unclear on why they would be taking them back at all. Pension payments are usually a part of you contracted salary. Is there a clause in your contract that says that they can do this if you don't stay there a defined length of time or something?

Basically this is the what happened;

Last Thursday the pension company rang me to tell me I had the option of getting a refund of my pension contributions because I was leaving the company scheme before 2 years which is the law. The company also were entitled to their Monday back.

But on Friday the pension company rang both me and the company to say because I was allowed to transfer 3 years worth of a pension from a previous employer to the pension scheme that this now added up to 4.5 years which is past the 2 years.

The company then said to me that they want their contributions back either way so they will deduct my wages for the amount. It does not state this in my contract.

All they are telling me is that it is a general pension rule! Chancing their arm I think.

Ocean Blue

No Pants wrote: »

I'm still unclear on why they would be taking them back at all. Pension payments are usually a part of you contracted salary. Is there a clause in your contract that says that they can do this if you don't stay there a defined length of time or something?

It's standard enough in my experience that employer pension contributions are only guaranteed after a certain length of service. Same has happened to me previously where employer contributions were taken back on leaving after a short period. My memory is that my contract was such that pension benefits were set up as more of a bonus than a component of salary.

Paulbut2000

Ocean Blue wrote: »

It's standard enough in my experience that employer pension contributions are only guaranteed after a certain length of service. Same has happened to me previously where employer contributions were taken back on leaving after a short period. My memory is that my contract was such that pension benefits were set up as more of a bonus than a component of salary.

On my contract it states the pension is a as you say a component of salary. My argument is that it states no where in my contract that they can do this plus they gave permission for me to transfer my previous pension to theirs so they knew what they were getting into.

Ocean Blue

Paulbut2000 wrote: »

On my contract it states the pension is a as you say a component of salary. My argument is that it states no where in my contract that they can do this plus they gave permission for me to transfer my previous pension to theirs so they knew what they were getting into.

Well if that's clear in your contract show the employer that clause. If they still won't agree you may need to get legal advice if you wish to pursue it. Not sure what else you can do.

Ocean Blue

Paulbut2000 wrote: »

On my contract it states the pension is a as you say a component of salary. My argument is that it states no where in my contract that they can do this plus they gave permission for me to transfer my previous pension to theirs so they knew what they were getting into.

On the issue of them knowing what they were getting into, I don't think that's very relevant. They wouldn't likely have known or cared whether that previous balance was made up of your contributions, previous employer contributions, or a mix of both.

Paulbut2000

Ocean Blue wrote: »

On the issue of them knowing what they were getting into, I don't think that's very relevant. They wouldn't likely have known or cared whether that previous balance was made up of your contributions, previous employer contributions, or a mix of both.

The thing is I have no problem with them taking all their contributions back from the pension scheme but the pension scheme won't allow this do should the company be chasing the pension scheme for their contributions back rather than keeping my wages.

I was under the impression that a company can only deduct wages for overpayment, disciplinary issues or an agreement signed in a contract.

Grassey

I work in pensions and deal with this daily.

If you had not transferred previous pension into this scheme then if you had less than 2 years in pension scheme with employer you are entitled to a refund.

By the Trustees (presumably company directors) permitting and accepting a transfer from your previous scheme they accepted that this will increase the combined pensionable service you have with within their scheme as service transfers with the monetary amount. In this case bringing you over the 2 year date for refunds.

As your aggregate years of service is now over 2 years you can transfer the entire amount, and not avail of refund. The company cannot deduct the value of their contributions from your final salary as the Trustees took on the risks when they accepted the transfer in payment to their scheme.

Legally they lost all claim to the value of of contributions once they accepted the transfer, and have no recourse to salary in lieu of this.

Paulbut2000

Grassey wrote: »

I work in pensions and deal with this daily.

If you had not transferred previous pension into this scheme then if you had less than 2 years in pension scheme with employer you are entitled to a refund.

By the Trustees (presumably company directors) permitting and accepting a transfer from your previous scheme they accepted that this will increase the combined pensionable service you have with within their scheme as service transfers with the monetary amount. In this case bringing you over the 2 year date for refunds.

As your aggregate years of service is now over 2 years you can transfer the entire amount, and not avail of refund. The company cannot deduct the value of their contributions from your final salary as the Trustees took on the risks when they accepted the transfer in payment to their scheme.

Legally they lost all claim to the value of of contributions once they accepted the transfer, and have no recourse to salary in lieu of this.

Thanks grassey, that's what I thought to. I am part of siptu but they are very slow getting anything done about this. I started a new job this Monday and need my p45 but it's being held because of this issue. Would the rights commissioner get involved or the NERA be better to go to first.

Paulbut2000

Paulbut2000 wrote: »

Thanks grassey, that's what I thought to. I am part of siptu but they are very slow getting anything done about this. I started a new job this Monday and need my p45 but it's being held because of this issue. Would the rights commissioner get involved or the NERA be better to go to first.

Just to fill ye in, got all my wages back today with a quick call to explain I would be seeking legal advise on the issue as my contract does not state that you can deduct my wages in this way.

Have a good mind to report them for misconduct to the rights commissioner. Thanks for the advise all.

ANXIOUS

Pension ombudsman