Rogue construction firms face pensions probe

AN investigation has been launched into how families of deceased construction workers are being denied almost €65,000 in benefits because employers are not paying pension contributions.

Pensions Ombudsman Paul Kenny is to investigate the widespread abuse of pensions law in the industry and workers will protest at Government Buildings in the coming weeks.

Mr Kenny said he was extremely worried that construction firms were failing to pay pension contributions for workers, with families being deprived of badly needed mortality benefits.

Of the 30 who lost their lives on construction sites between January 2002 and July 2003, only eight were covered by the pension scheme. Many more would have died of natural causes or non-work-related accidents without their families receiving mortality benefits.

"If the statistics from last year are any indication, then I would say this is an extremely worrying situation that people seem to have been able to ignore legal obligations," said Mr Kenny. By law all construction firms must register their employees in the Construction Federation Operatives Pension Scheme (CFOPS) and pay contributions to cover workers' pension and sickness benefits.

In return, employees receive sickness benefits and, in the case of death, a mortality benefit of €63,500 is provided to their family.

The CFOPS scheme is the largest pension scheme in the country, with 54,000 members and funds running into billions. A related agency, the Construction Industry Monitoring Agency (CIMA), is responsible for policing the scheme and cracking down on rogue employers. However, up to 50,000 construction employees are being cheated of their pension and sickness benefits worth an estimated €35m annually.

The Pensions Board has written to 400 non-compliant companies warning them they face legal action if they do not pay for their workers, but as two more unregistered builders died in recent weeks, Mr Kenny said he was anxious to pursue any company responsible for seeing families lose benefits.

"The survivors of anybody who dies on a building site or, indeed, anyone who should have been in that scheme who dies of natural causes are entitled to that benefit," he said.

Mr Kenny said he could investigate all cases of companies depriving families of mortality benefits going back six years to April 1996. He would be seeking extra payments to cover inflation in old cases.