Public funds will be used to cover missing contributions in a pension scheme run by the iconic bakery Morton's Rolls, which collapsed in 2023. Former employees reported that the company failed to pay money into their pension plan for months before going into liquidation, even though deductions continued to be taken from their wages.
BBC Scotland reviewed documents showing gaps in payments lasting up to a year. According to the UK Insolvency Service, National Insurance funds will now be used to replace the missing contributions.
Nancy Dunnachie, 65, widow of long-time employee William Dunnachie, described her husbands frustration as she looked through a pile of letters from his pension provider, each stating that expected employer payments had not been received. These notices were issued repeatedly between 2020 and 2023, despite clear pension deductions shown on his payslips.
William, known as Wullie, died of a heart attack in October while waiting for redundancy money. His widow recently received a redundancy cheque following a two-year dispute over who was responsible for paying it out, although she still cannot access the funds as they remain in her husbands name. She continues to seek answers regarding his missing pension contributions.
Several former employees told the BBC that they too had experienced missing pension payments. One worker said he raised concerns as early as 2019. Another, Alan Love, 64, who worked for Morton's for 32 years, showed documentation from Standard Life revealing numerous missing contributions, including a gap spanning December 2021 to January 2023.
Love said deductions were taken from his wages weekly but not transferred to the pension scheme. Over time, the delays worsened until the company collapsed, leaving him two years short in contributions. He also said he alerted the Pensions Regulator before the company folded.
Morton's Rolls, based in Drumchapel and famous across western Scotland for its morning rolls, had faced financial strain before shutting down and laying off 230 staff. Shortly afterward, 110 employees were rehired under a new owner, Phoenix Volt Limited, which took over the bakerys assets. A former director of Morton's now works for the new company.
The liquidation triggered a lengthy court battle as 98 employees sought redundancy payments from the UK governments Redundancy Payments Service. The government initially argued they were not eligible because their roles had transferred to the new owner. However, a tribunal ruled that the workers were entitled to payments, which will now come from the National Insurance Fund.
Legal representatives estimate approximately 500,000 will be distributed in redundancy payments, with potential total compensation reaching 1 million when including a protective award for the companys failure to consult staff before dismissals. Many former workers experienced severe financial hardship during the prolonged wait, and one claimant died during the process.
Standard Life stated that when an employer misses pension contributions, a formal 90-day process is triggered to recover the funds, and if payments remain outstanding, the Pensions Regulator is notified. Members are also informed of the missed contributions.
FRP Advisory, appointed as administrator in 2023, has submitted a new claim to the Redundancy Payments Service seeking coverage for unpaid pension contributions. Under the scheme, employees can recover deductions taken from their wages but not paid into their pension during the 12 months prior to the company's insolvency.
The Insolvency Service confirmed it will not appeal the tribunal ruling and that payments, including pension amounts, are now being issued to affected workers.