I’ve reached a dead end finding an old pension: STEVE WEBB replies

I am trying to track my various pensions and would like some advice. My contributions from September 1999 to April 2001 have gone missing.

I’d worked at my old employer from 1997 to 2001 and paid pension contributions throughout.

My employer changed its pension provider in mid-1999, but the new scheme says it has no records of me.

And it is hard to sort things out now because my old employer does not have employment records from that period.

HMRC has provided contracted out history that shows I was enrolled in the original scheme beyond 1999.

What can be done to track the missing contributions short of referring the matter to the Pensions Ombudsman?

Missing retirement cash: Where can you turn if employers and pension schemes can find no trace of your contributions

Steve Webb replies: It is several months since you first contacted me about this issue, and since then we’ve been on something of a ‘treasure hunt’.

But the good news is that we’ve been able to reinstate at least some of your missing pension. And the lessons I have learned along the way could help many more readers in a similar situation.

I periodically hear from people who know that they worked for a particular employer and are sure that they paid in to the workplace pension, but where the pension scheme has a gap in their service.

In the absence of records, the pension scheme usually asks the member to go back to the employer to provide proof of employment and pension contributions.

But often, as in your case, decades have gone by and neither the member nor the employer any longer has records.

But the good news is that HMRC may well have records which can help, which is what happened in your case.

The first thing we looked at was HMRC’s records about periods when you were ‘contracted out’ of the old state earnings-related pension scheme (SERPS). Most traditional final salary type pensions operated on this basis.

The key point about contracting out was that you and your employer paid reduced NI contributions but your scheme had to provide a pension at least as good as the SERPS pension you were giving up.

The significance of this is that to be allowed to pay reduced NI, HMRC needed to know the scheme you were contracted out into. And these records can be the first stage in proving your scheme membership.

In your case, the HMRC records were a bit odd, in that they showed a short gap in service between July 2000 and March 2001 which we cannot explain.

But they did show you were contracted out beyond the point where your scheme said your membership ended – between September 1999 and June 2000.

However, as the scheme had no record of any contributions for this period, they were looking for further evidence that you had actually been paying in.

To help with this, we used the Subject Access Request process to ask HMRC for details of your employment history around this time.

HMRC was able to supply the following key information.

Your earnings for each financial year

How much you paid in income tax

How much you paid in National Insurance Contributions

Your final tax code for the year.

This is extremely valuable information in trying to reconstruct your pension record.

Starting with your income tax bill, the key point is that pension contributions are tax deductible.

This means that someone on a given level of earnings would pay less income tax if they paid into a pension than if they didn’t. And we were able to find out from the scheme how much someone on your earnings would have paid into their pension.

Armed with this information I was able to work out your income tax bill in 1999/2000 first on the basis you hadn’t paid into a pension and second on the basis that you paid in for the full year.

The second calculation matched almost exactly, which provided strong evidence of membership for the full year.

The second key piece of information was your National Insurance figure. People who were ‘contracted out’ paid a lower rate of NI than those who were not.

So, again, I worked out your NI on the basis first that you had not been a member of the scheme and second that you had been a member of the scheme throughout.

Again, the figures only tallied on the basis that you had contributed throughout the 1999/2000.

I provided this evidence to the scheme and it was willing to agree that you must have been paying in for that financial year.

The scheme then dug out a notice it had received from HMRC which suggested it had a liability to pay you a ‘Guaranteed Minimum Pension’ to the end of 1999/2000 and up to the end of June 2000.

Piecing all of this together, it became very hard for the scheme to dispute that you had been contributing.

And it also knew what you were earning in the period in question. So it has now agreed to reinstate your service for the extra 10 months and using your updated salary information.

Although this still leaves a period where there are simply no records to confirm your membership, this extra 10 months should hopefully make a modest improvement to the pension that you receive throughout your retirement.

As you might imagine, HMRC is keen that people use online records in the first instance when they are looking for evidence around pension contributions.

An HMRC spokesperson said: ‘Customers can find information we hold on them for the current tax year and the last five years in their online accounts or via the HMRC App. Customers can also request further information by contacting us.

‘If the information that you need goes back further than five years (which is likely to be the case where there are no longer any reliable records available from a former employer) then readers can make a ‘Subject Access Request’.

They can also try the PAYE and NI helplines or their Personal Tax Account to ask for relevant information.

I hope that this information will provide a way forward for people who have reached a dead end in their efforts to prove service in a pension scheme some years ago, especially where their employer no longer holds records.