Smart Pension Plan · CAS-88359-S7J2

CAS-88359-S7J2

Ombudsman’s Determination Applicant Mr Hyman

Plan SMART Pension Plan (the Plan)

Respondent SMART Pension Limited (SMART)

Outcome

Complaint summary

Background information, including submissions from the parties

The Pensions Act 2008 introduced a duty for employers to make arrangements by which the jobholder becomes an active member of an automatic enrolment scheme with effect from the automatic enrolment date.

Under the Pensions Act 2008, all employers must enrol certain workers into a pension scheme (automatic enrolment). Between 1 October 2012 and 1 April 2017, all employers in existence on 1 April 2012 had to begin their automatic enrolment duties. For new employers, set up between April 2013 and September 2017, their automatic enrolment duties started between 1 May 2017 and 1 February 2018. New employers from October 2017 onwards had immediate automatic enrolment duties.

In accordance with Part One of the Pensions Act 2008, employers are responsible for establishing whether or not they need to provide a pension scheme and what their duties are. Employers who are required to provide a pension scheme, must:-

1 CAS-88359-S7J2 • Set up a pension scheme.

• Automatically enrol eligible jobholders into a pension scheme from their first day of employment and deduct pension contributions from their pay.

• Inform staff how automatic enrolment applies to them, within six weeks of the employer duties start date.

• Declare their compliance to The Pensions Regulator (TPR) within five months of their duties start date.

• Provide enrolment information to the member that confirms that they have been or will be automatically enrolled. They should also provide information on the right to opt-out and where the member can find further information about pensions.

Part two of The Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010 introduced a duty for employers to automatically enrol eligible jobholders working for them who were not already a member of a qualifying scheme into an automatic enrolment scheme.

In July 2021, Mr Hyman started working for London Borough of Redbridge Council on a contract. He owned a property company, Ascott Asset Management (AAM), which contracted itself out to councils.

In September 2021, Mr Hyman started work with Exact Payroll (the Employer). AAM was sub-contracted to the Employer.

On 29 October 2021, SMART sent an email to Mr Hyman’s AAM business email address to inform him that he had a letter in his SMART pension inbox.

On the same day, Mr Hyman told SMART that he did not want it to automatically enrol him into the Plan and he asked it to remove his details from its database. He also emailed the Employer to confirm the same.

In response, the Employer emailed Mr Hyman to say that it could not stop his automatic enrolment into the Plan and that he would have to follow the automatic enrolment process to opt out.

On 6 November 2021, SMART emailed Mr Hyman to inform him that his Employer had postponed his automatic enrolment until January 2022, so if he did not wish to be in the pension he did not need to do anything at that time. SMART told Mr Hyman that he should, however, note that at the end of the postponement period his Employer was legally obligated to assess his eligibility for the pension again. It said that if he was then eligible for the Plan, he would be automatically enrolled and sent a notification of his enrolment. SMART said that once Mr Hyman was enrolled, he would have one calendar month to opt out of the Plan and no contributions would be due.

2 CAS-88359-S7J2 On the same day, Mr Hyman emailed SMART. He explained that the Employer had told him that he needed to talk to SMART about automatic enrolment into the Plan. Mr N reiterated that he did not want another pension, and he asked it to remove his details.

On 1 March 2022, SMART automatically enrolled Mr Hyman into the Plan. On the same day, it emailed Mr Hyman a notice of automatic enrolment at the email address given to it by the Employer (the AAM business email address).

On 17 March 2022, Mr first became aware that SMART had automatically enrolled him into the Plan, after seeing deductions on his payslip. SMART refunded the contributions to Mr Hyman via his Employer within the following three weeks.

On 6 April 2022, Mr Hyman complained to SMART. He said:-

• It did not tell him it was acting on behalf of the Employer.

• It emailed him many times over several months despite him telling them he had a pension and he was not interested in having a new pension.

• Without his knowledge or consent, it automatically enrolled him into a pension and took contributions from his pay.

• The Employer had refunded all his contributions, but he wanted an apology, an award of £750 and his data erased.

Hyman

Hyman

Hyman

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On 9 June 2023, Mr Hyman made a complaint to SMART under the Plan’s Internal Dispute Resolution Procedure (IDRP).

On 16 October 2023, SMART sent Mr Hyman its IDRP response. It did not uphold his complaint.

Following the complaint being referred to The Pensions Ombudsman (TPO), Mr Hyman and SMART made further submissions that have been summarised below.

Summary of Mr Hyman’s position:-

• The crux of his complaint was that SMART had repeatedly emailed his company, AAM, stating that it was the Employer’s pension provider and that it was inviting him to join the Plan.

Summary of SMART’s position:-

• It was authorised to keep records for six years in accordance with its own guidelines and its data retention policy. Consequently, it was unable to remove Mr Hyman’s details from its records.

4 CAS-88359-S7J2 • On 1 March 2022, it emailed Mr Hyman his automatic enrolment notice. It records showed that someone opened the email the same day. The email had information about opting out and it stated Mr Hyman’s opt out period dates. The fact that someone opened the email suggested Mr Hyman had received his statutory enrolment notice and he had been made aware of his one month opt out period.

• Once it reviewed Mr Hyman’s complaint, SMART processed a refund of £745.36 to the Employer. This was for the contributions paid between 10 January 2022 and 3 April 2022.

• SMART provided Mr Hyman with the correct information concerning automatic enrolment and it had acted in accordance with the rules and regulations set out for Master Trusts.

Adjudicator’s Opinion

• SMART had followed the correct automatic enrolment procedures. In addition, it had already refunded Mr Hyman’s contributions to the Employer who had then passed them onto to Mr Hyman, so he had not suffered a financial loss.

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Ombudsman’s decision

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Anthony Arter CBE

Deputy Pensions Ombudsman

17 October 2024

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