TBG Flex Pension Scheme query submitted to the Pensions Regulator

Barnet UNISON have submitted a query to the Pensions Regulator in regard to TBG Flex Pension Scheme :

 

Query: Is this employer’s pension scheme compliant with regulations?

 

Further to my conversation with James Marshall and as agreed I am writing to provide the relevant information for The Pensions Regulator to decide whether the Pension Scheme operated by the employer (TBG Flex Ltd.) meeting the intention of Parliament under Automatic Enrolment legislation.

 

The Company

TBG Flex Ltd (set up as an employment company in 2017 to avoid new staff being able to join the Local Government Pension Scheme) is a subsidiary of The Barnet Group which was set up in 2006 as separate entity to provide Housing and Care Services for the London Borough of Barnet.

 

Automatic Enrolment

Automatic enrolment commenced for staff employed by TBG Flex Ltd at the company’s inception in 2017. [Please see  TBG Flex Pensions April 2019.]

 

Staff Benefit

All TBG Flex staff receive employee benefit (called Flex Benefit) of 5% or 10% (depending on grade) of salary are paid to staff in addition to salary. The Flex Benefit can be used by staff to top up store cards, purchase dental care insurance, dining card etc. and allows the employer TBG Flex Ltd to pay employer’s contribution in respect of staff participation in Automatic Enrolment.[Please Introduction to Flex Benefit September 2018 and TBG Flex Employees Benefit 2019.]

 

Effect of Automatic Enrolment under Flex Benefit

For staff choosing to join the TBG Flex pension scheme have to sacrifice their Flex Benefit because the employer TBG Flex Ltd pays the employers contribution from the Flex Benefit “earned” by staff. This policy of meeting the employer’s pension contribution from Flex Benefit incentivises staff not to join the pension scheme in the first place and incentivises those staff in the pension scheme to leave.

 

Discrimination

The staff in the pension scheme under Automatic Enrolment enjoy lower Flex Benefit compared to their colleagues on the same salary grade who decide to opt out of Automatic Enrolment.

 

Concerns

I am concerned that this employer’s Auto Enrolment Pension Scheme is not meeting the intention of Parliament in that employer pays employer’s statutory contribution from the Flex Benefit accrued to these staff. Further it incentivises staff not to join the pension scheme in the first place and incentivises those staff in the pension scheme to leave. Finally, staff in the pension scheme are discriminated as these staff participating in Automatic Enrolment enjoy lower Flex Benefit compared to their colleagues on the same salary grade who decide to opt out of Automatic Enrolment.

 

The query has been acknowledge awaiting further investigation.

TBG Flex members with issues or complaints about the Flex Benefits reward system please write to contactus@barnetunison.org.uk