Pension claims, particularly RP15 pension claims in the context of insolvency cases, have long been a complex and sensitive issue. The intricacy of these claims often necessitates a nuanced understanding of pension contribution deductions and insolvency law covering claims to the Redundancy Payments Service (RPS). However, pension providers will frequently offer their services to undertake RP15 claims on behalf of Insolvency Practitioners (IPs) at no cost to the insolvency.
Why is this a dangerous precedent?
Darren explains.
1. The calculation of RP15 pension claims involves a thorough understanding of the specific legislation and regulatory guidelines that state that any person calculating the claim needs to be considered “competent.” Now, I’m not for one second suggesting that pension providers such as NEST, NOW Pensions, etc, aren’t competent; of course, they are in terms of pension scheme administration and investment.
To compile an RP15 claim, the “competent” person must have received pension contribution schedules, payslips for members, and their leaving dates. This is never the case for pension providers who work on an assumption of what they expect to receive pension contribution-wise from the employer for each member from the last contribution received to the day before insolvency.
2. Has there been a claim for unpaid wages to the RPS by the employees covering the same period as the pension claim using an RP14 form? If so, we cannot claim the employee pension contributions for the same period, but we can claim the employer contributions. Would a pension provider know if an RP14 claim had been submitted?
3. As a matter of courtesy, we write to members about their RP15 pension contribution claim that we are making on their behalf and allow them to agree or disagree with our calculations. Pension providers do not do this, which doesn’t sit well with SIP 9 for insolvency professionals and transparency.
4. Insolvency Practitioners are under greater scrutiny now from their Recognised Professional Body, and signing off an RP15 form that a pension provider has completed simply won’t cut it. You will need members’ payslips and dates of leaving to see what pension contributions were deducted during the RP15 claim period to sample-check their calculation, again, something a pension provider wouldn’t have seen.
5. Payments from the RPS in respect of unpaid pension contributions are paid out of the National Insurance Fund. When an Insolvency Practitioner signs off on an RP15 claim form, he/she is verifying its accuracy and ensuring that a fraudulent claim isn’t made. How can such a claim be considered accurate and non-fraudulent if it hasn’t been put together by a competent person in receipt of all employee payslips and dates of leaving?
In conclusion, the competence of pension providers to calculate RP15 pension claims on behalf of Insolvency Practitioners is questionable and shouldn’t be relied on by Insolvency Practitioners.
And best practice?
Insolvency Professionals or their ERA/Pension Agents are much better placed to undertake RP15 pension claims due to:
- their knowledge of the insolvent business,
- the insolvency business employees (particularly if involved with ERA) and
- their experience in handling the complex interplay between pension rights, insolvency procedures, and the RPS.
Contact us to discuss how we can help.
