Pensions Ombudsman confirms employer and scheme automatic enrolment responsibilities

In this decision (9 pages / 1.89 MB), the PO emphasised the importance of employers and scheme providers complying with the requirements of the automatic enrolment legislation, even where members object to following the relevant procedures.

In this case, a member owned an asset management company which contracted itself out to local councils. In September 2021, the member commenced work with an employer, to whom his company was sub-contracted.

On 29 October 2021, the pension provider contacted the member in relation to his automatic enrolment into a pension plan. The member responded to say that he did not want to be automatically enrolled and informed the employer of this. However, the employer told the member that it could not stop his automatic enrolment and that he would have to opt-out of the plan following the proper process.

On 6 November 2021, the pension provider informed the member that his employer had postponed his enrolment until January 2022. The member was also informed that the employer would be under a legal obligation to assess his eligibility for the pension again following the postponement and that, if he was eligible, he would be automatically enrolled at that point. The pension provider confirmed that, once he was automatically enrolled, he would have one calendar month to opt-out, which would result in no contributions falling due.

The member again informed the provider that he did not wish to be automatically enrolled and asked them to remove his details from its database.

On 1 March 2022, the pension provider automatically enrolled the member into the plan and emailed him to confirm this.

The member stated that he first became aware of the automatic enrolment on 17 March 2022 when he saw pension deductions on his payslip. The pension provider refunded these contributions via the employer within three weeks. However, the member complained to the provider that it did not inform him that it was acting on behalf of the employer, emailed him numerous times despite him informing them that he did not wish to be automatically enrolled, and automatically enrolled him into the plan without his knowledge or consent, taking contributions from his pay.

The member also stated that he wanted a formal apology, a payment of £750, and for the pension provider to erase his data from its database.

The provider responded, informing the member that it was complying with law and regulatory guidance by retaining his personal data, and in relation to its obligations regarding automatic enrolment. It also provided evidence that its email to the member confirming his enrolment on 1 March 2022 had been opened shortly after delivery. This email had provided the member with the instructions to follow if he wanted to opt-out of the plan and the relevant deadline. Finally, the provider apologised if the member was not satisfied with its level of service.

After further exchanges, the member escalated his complaint to the PO. The member stated that the provider behaved in an unprofessional manner, and that he had been concerned its activity was fraudulent as he believed that it was attempting to sell him a pension. He sought compensation for malpractice and for the inconvenience caused to him. He also requested his data be deleted. 

In response, the pension provider stated that it was authorised to keep records of data for six years under its data retention policy. It confirmed that it had acted in accordance with applicable law and regulation and drew attention to its email to the member regarding automatic enrolment, and the fact that it was opened shortly after receipt. This email had information relating to opting out and the relevant opt out period. The provider also drew attention to the refund provided to the member via the employer totalling £745.36.

The PO found that the employer and provider had correctly followed the automatic enrolment procedures set out by law. It also found that the provider had given an appropriate explanation of the opt out process. The PO commented that the member could have made enquiries about the provider and could have quickly found that it was a reputable master trust.

The PO was clear that there had been no maladministration by the pension provider, nor had the member suffered any financial loss. The PO noted the provider’s apology for any inconvenience and helpfully commented that, in its view, a master trust can keep members’ details for a period of up to six years. The PO also recommended that the member address any further concerns about personal data to the Information Commissioner’s Office, reflecting the PO’s renewed emphasis on ensuring that complaints are directed to the appropriate body.