Pensions Board issues 16 fines

The Pensions Board took four enforcement actions last year and has issued 16 fines to employers and trustees of pension schemes.

Speaking at the unveiling of the Pensions Board's annual report today, chief executive Brendan Kennedy said although the fine system was only introduced last September, “it has definitely increased compliance”.

On-the-spot fines of €2,000 can be issued for each offence to an individual trustee of a pension scheme that fails to comply with Pensions Board rules.

The board sought the introduction of a fine system as an alternative to going to court for less serious infringements of the Pensions Act.

The four prosecutions concerned employers who had failed to respond to requests for information about their PRSA obligations from the board.

Minister for Social and Family Affairs Mary Hanafin admitted that the growth in the number of people contributing to a pension was "not at a rate which would suggest we can reach coverage targets within any kind of reasonable timescale”.

She urged young people not to put off starting a pension, however, because then "the costs can be so much more expensive".

The National Pensions Review recommended that 70 per cent of people aged over 30 hold a pension, but Mr Kennedy said today the current level was around 62 per cent.

The Pensions Board's report shows that almost 800,400 people belong to an occupational pension scheme, an increase of almost 3 per cent on 2006. Pension schemes regulated by the board hold approximately €80 billion of assets.

Some 530,933 people are members of 1,411 defined-benefit schemes registered with the board. Just under 270,000 employees are members of a defined contribution scheme.

The number of PRSAs at the end of 2007 was 130,709, over three quarters of which were standard contracts. The value of these assets was €1.25 billion. More than 84,550 employers have signed up with a PRSA provider and 45,243 employees had taken one by the end of last year.

On a day when shares on the Dublin market were under pressure Mr Kennedy said the message for investors was to be aware of risk not just potential savings.

He added that the current downturn should not be seen as a “crisis”, although he admitted this depended on how close a person was to retirement.

He said investment returns last year had been disappointing for most schemes and that the value of assets in these schemes had fallen at the start of this year.

Mr Kennedy added that from November 1st all pension administrators would be obliged to register with the board.

“This new regulation will provide important support for trustees who can be confident that those they employ to carry our significant compliance tasks on their behalf are independently supervised“, he said.