Pension scheme members are losing millions of pounds through delays in payment of National Insurance...
Pension scheme members are losing millions of pounds through delays in payment of National Insurance Contribution (NIC) rebates to Comps.
This is the conclusion reached by Johnstone Douglas after a survey of 120 Comps schemes in which it found that only 21% of the age-related element of the NIC rebates, due from the Government, have been paid.
The Government has estimated that about 500,000 employees are contracted out through these schemes, and if they all follow the same pattern, then Johnstone Douglas calculates that at 1 January 2000, more than £200m has not been paid across to them by the NIC office.
Doug Johnstone, executive chairman at the group, said: "Although the Government is giving late payment interest of 0.5% per month, the managed pension funds through which most employees invest their pension contributions have grown at a much quicker rate. The first NIC rebates were due in October 1998 and from then until 31 December 1999, the median managed fund grew by 37%, compared to 7.5% interest granted by the Government."
Based on these statistics, Johnstone Douglas estimated that at 31 December 1999, Comps members may have lost as much as £47m in investment gains that can never be made up.
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