Nest · CAS-101488-R3X6

CAS-101488-R3X6

Ombudsman’s Determination Applicant Mr L

Scheme NEST (the Scheme)

Respondents Lucy A Raymond & Sons Ltd (the Employer)

Outcome

Complaint summary

Background information, including submissions from the parties The sequence of events is not in depute, so I have only set out the salient points.

On 2 November 2020, Mr L commenced work for the Employer.

On 30 November 2020, the Employer deducted pension contributions from Mr L’s pay.

On 7 December 2020, the Employer enrolled Mr L into the Scheme. Mr L opted out of the Scheme on 15 December 2020.

1 CAS-101488-R3X6 On 31 December 2020, the Employer deducted a further pension contribution from Mr L’s pay.

Mr L’s employment with the Employer was terminated in December 2020. He took the employer to an Employment Tribunal (ET), and a settlement was reached in June 2022. The ET did not determine Mr L’s concerns regarding not refunding his employee pension contributions.

On 18 February 2023, Mr L brought his complaint to The Pensions Ombudsman (TPO).

Mr L provided copies of the payslips that he held for November 2020 and December 2020, which detailed the pension contributions deducted from his pay and the corresponding employer contributions. The employee deductions amounted to £145.06. A breakdown of deductions has been included in Appendix One.

If you have opted out within the opt-out period, the contributions paid to NEST will be refunded to your employer.

It takes up to 10 working days for the contributions to be refunded to your employer’s account.

It is the employer’s responsibility to provide you with the refund after they received it from Nest. (the opt-out guidance)

Adjudicator’s Opinion

The Adjudicator stated that although

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• The Adjudicator was of the view that Mr L had suffered significant distress and inconvenience as a result of the maladministration from the Employer. No attempt had been made by the Employer to put the matter right which would have further exacerbated the issue. The Adjudicator was of the opinion that an award of £500 for non-financial injustice was appropriate in the circumstances in addition to a refund of employee pension contributions.

Mr L did not accept the Adjudicator’s Opinion and in summary raised the following points:-

• He maintains that he is entitled to receive interest on the contributions deducted in 2020 that were not refunded.

• The level of redress for the distress and inconvenience he has suffered should be considered exceptional, given the impact the situation has had on him and the length of time the issue has remained unresolved.

The complaint was passed to me to consider. I agree with the Adjudicator’s opinion, except in relation to the level of non-financial injustice. I also conclude that interest should be paid on the employee contributions that were not refunded.

Ombudsman’s decision

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Directions

(i) pay Mr L £1,000 for the serious distress and inconvenience he has experienced;

(ii) pay Mr L £145.06 for the contributions deducted from his pay which were not refunded to him.

(iii) pay simple interest calculated at the Bank of England base rate, on the refunded employee contributions amounts from 1 January 2021 (being shortly after the opt- out was processed and the refund should reasonably have been made) to the date the contributions are refunded.

Camilla Barry

Deputy Pensions Ombudsman 27 November 2025

4 CAS-101488-R3X6 Appendix One Payslip Date Employee Contributions Deducted

30/11/2020 £72.53

31/12/2020 £72.53

Total amount to refund £145.06

5 CAS-101488-R3X6 Appendix Two NEST website guidance for opting out

How will my contributions be refunded now I’ve opted out?

How does Nest refund the contributions and to who?

• If you’ve opted out within the opt-out period, the contributions paid to Nest will be refunded to your employer.

How long does the refund take?

• It takes up to 10 working days for the contributions to be refunded to your employer’s account.

Who will refund my contributions?

• It’s your employer’s responsibility to provide you with the refund after they have received it from Nest.

• If you’ve not received the refund, please speak to your employer.

How will I receive the confirmation of my opt-out?

• You’ll receive the opt-out confirmation by email or post, depending on the option that you’ve selected while opting out.

• If you haven’t received your opt-out confirmation, visit Why haven’t I received a confirmation of my opt-out?

• Your employer will also receive confirmation of your opt-out in their Nest secure mailbox.

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