Monday 1 May 2017

Misuse of staff pension pay is 'theft'

Charlie Weston Personal Finance Editor

PENSIONS Ombudsman Paul Kenny has hit out at firms that regard pension contributions paid by employees as working capital for the company.

Mr Kenny said he was investigating hundreds of cases where firms, mainly in the construction sector, were misusing pension payments made by staff.

"In some companies people have been using pension contributions as working capital for a great many years, and accountants do not seem to have cottoned on to it.

"This is particularly the case in the construction industry," he said.

Speaking to the Irish Independent, he warned there were dire consequences for any firms that neglected to put contributions made by staff into a pension fund.

He said the failure of building firms to place pension money in a fund was "nothing short of theft" and meant that families of construction workers who had died, sometimes as a result of a workplace accident, could discover they were not entitled to death-in-service benefits, worth up to €75,000.

Employers identified as having breached their obligations could face criminal conviction and a District Court fine of up to €5,000.

Building firm owners confronted by Mr Kenny regarding a pensions' shortfall usually claimed there was a cashflow problem in the company, the pensions ombudsman said.

Mr Kenny is a statutory officer and his determination in pension disputes can only be overturned by the High Court. He warned that action would be taken against any companies failing to pay pension contributions and offenders would be taken to court.

Complaints

In his annual report last summer Mr Kenny said his office had recorded a 56pc increase in the number of complaints received in the first half of this year when compared with the same period in 2008.

In the period January to June 2009, a total of 908 new complaints were received by the ombudsman, as against 582 for the same period in 2008.

Irish Independent

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