Pension fund trustees face criminal liability as 80% of schemes in deficit

The Irish Pensions Board warned that pension fund trustees face criminal liability if found to be in breach of their statutory duties as it revealed 80% of schemes are in deficit.

So far, the board has successfully prosecuted 26 cases and is vigorously pursuing 36 more this year, IPB chief executive Brendan Kennedy revealed.

Speaking at the launch in Dublin of the board’s 2011 annual report, Mr Kennedy said: “Where the board uncovers non-compliance with the Pensions Act or receives whistleblow reports to that effect we will have no hesitation in taking appropriate action right up to and including prosecution.

“In recent years, prosecutions have almost entirely been where employers have deducted contributions from employees’ wages and not passed them on to the pension scheme, that is, they kept them.”

Mr Kennedy said the pensions board was aware of several cases where offending companies have been put into liquidation and the same directors started a new business and continued their deductions and failure to remit.

“Our prosecution of these cases takes up a considerable amount of board resources, which reflects the seriousness of the problem and of the offence. We welcome the fact that the courts are treating these offences with the seriousness that they merit.”

During 2011, the board successfully prosecuted 26 cases and had fines totalling €14,000 paid over by seven trustees of three schemes, amounting to individual fines of €2,000 each.

The board also carried out 13 on-site inspections of registered administrators and 25 inspections of pension schemes.

The annual report shows the number of active members of occupational pension schemes has fallen substantially since 2010, which is a matter of “serious concern”, according to IPB chairwoman Jane Williams.