The Pensions Ombudsman (TPO) has upheld a complaint against an employer for failing to pay contributions into a worker’s Nest pension due to maladministration.

The Machining Centre Ltd was ordered to pay just over £5,000 into the scheme and to ensure that the complainant, Mr S, is not financially disadvantaged by its maladministration.

The firm has therefore also been ordered to arrange for any investment losses to be calculated and paid into the scheme.

Furthermore, the employer was told to pay Mr S £1,000 for the “serious distress and inconvenience” caused by its failure to pay his contributions into the scheme.

In the determination, TPO noted that Mr S had said that the employer was having problems with paying pension contributions into the scheme since 2019, and that, between April 2020 and March 2023, it had failed to pay his contributions to Nest despite them being deducted from his pay.

Mr S was made redundant by the employer in April 2023.

Following contact from TPO, the employer stated that it had not paid the pension contributions due to financial problems caused by the Covid-19 pandemic, and explained that its assets were later seized following action by one of its creditors.

In May 2024, the employer said it was unable to meet the terms set out for resolving the complaint, with TPO subsequently requesting evidence from the employer of its financial position.

Despite the employer stating it would provide evidence, no further contact was received from the company and the case was passed from the caseworker to the deputy pensions ombudsman, Anthony Arter.

In his determination, Arter stated: “I find that employee contributions were deducted but held back by the employer and not paid into the scheme. The employer failed to rectify this and resolve Mr S’ complaint following the caseworker’s opinion.

“The employer’s failure to pay employee and employer contributions into the scheme amounts to unjust enrichment and has caused Mr S to suffer a financial loss. The employer shall take remedial action to put this right.

“Mr S is entitled to a distress and inconvenience award in respect of the serious ongoing non-financial injustice which he has suffered. This was exacerbated by its failure to resolve the dispute during TPO’s investigation into Mr S’ complaint.”

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