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19 Oct 05: Pensions Ombudsman launches 2004 Annual report

Wednesday 19th October 2005: The Pensions Ombudsman today launched his 2004 Annual Report, together with a Digest of Cases, and presented a copy of the Report to the Minister for Social and family Affairs, Seamus Brennan TD, which is available on www.pensionsombudsman.ie. Speaking at the launch the Minister thanked the Pensions Ombudsman, Mr Paul Kenny, for presenting him with his Annual Report for 2004 together with a Digest of Cases. He said that since its establishment in 2003, the Office had provided a much needed and worthwhile service to the consumer. This was clearly demonstrated by the fact that up until the end of 2004 the Office had received over 450 official complaint cases and had dealt with over 1,500 telephone queries. He noted that some of the issues that the Pensions Ombudsman had highlighted in his report were not particular to the pensions industry but occurred all too frequently in other areas as well. In particular, he was struck by the number of complaints that had occurred primarily because of a lack of, or poor communication on the part of pension providers rather than because of a particular problem with the pension scheme per se. He went on to say “At a time when we are trying to encourage people to plan better for their retirement it is important that they are not frightened off taking out pension plans because of either the perceived complexity of the products on offer or the complexity of the language being used by pension providers.” In conclusion the Minister congratulated the Pensions Ombudsman on the great strides that he has made since his Office was established and wished him continued success in the future. The Pensions Ombudsman, in presenting his report highlighted a number of different issues that he had dealt with since he took Office. On a general basis he said that it was hard to escape the feeling that the quality and timeliness of information being provided to pension scheme members is at the root of a huge proportion of the complaints that reached his Office. This is an issue that applies equally to both public and private sector pension schemes. He went on to say “New Disclosure Regulations have been made by you, Minister, under the Pensions Act in the last couple of weeks, which will increase the amount of information available. Trustees, administrators and employers must realise that regulations can only demand the necessary minimum – and the necessary minimum on its own does not guarantee high quality communication.” Mr Kenny made particular reference to the operation of the Construction Federation Operatives’ Pension Scheme, which he said had featured in a number of despatches recently. He added “There is evidence of systematic non-compliance in relation to this scheme. The types of issues being discovered have included:
  • Failure to deduct and pay over contributions due to the scheme;
  • Failure to register eligible employees;
  • Failure to remit contributions already deducted from employees’ pay – within the deadlines set down by the Pensions Act – or at all;
  • Unethical practices in which workers are forced to pretend to be self employed.
It is clear that, in many cases where employers’ obligations under the Registered Employment Agreement for this industry have not been complied with, PRSA obligations under the Pensions Act have not been honoured either. I intend, in any case where I believe that the law has been broken, to refer the matter to whatever authority may be appropriate in the circumstances of the case, so that prosecution can be considered.” Mr Kenny concluded by saying “I believe that one of the most valuable features of an office like this is the opportunity it gives us to learn from what goes on in the world of pensions, and to pass on what we learn to those who make policy and to those responsible for the regulatory environment in which pensions live - the Minister and the Department of Social and Family Affairs, the Pensions Board, the Financial Regulator, the Department of Finance and the Revenue Commissioners.” Notes: Mr Paul Kenny was appointed as Pensions Ombudsman in April 2003 and his Office was open for business in September, 2003. The opening of the Office was another milestone in the reform process commenced in 2002 with the passing of the Pensions (Amendment) Act, 2002. Under that Act the Pensions Ombudsman has the power to investigate and determine:
  • complaints made by or on behalf of occupational pension schemes or Personal Retirement Savings Accounts (PRSAs) who allege that they have suffered financial loss as a result of maladministration by those charged with managing these arrangements,
  • any dispute of fact or law brought to his attention that arise from the actions of those administering occupational pension schemes or PRSAs.
The Pensions Ombudsman can give such directions as he considers necessary or expedient to resolve a dispute. His directions can include a financial settlement to cover the actual financial losses incurred by a person making the complaint. The decisions of the Ombudsman are binding subject to the right of appeal to the High Court. Contact Details Office of the Pensions Ombudsman 36 Upper Mount Street Dublin 2 Paul Kenny, Pensions Ombudsman: 01 647 1653, Email: info@pensionsombudsman.ie Web: www.pensionsombudsman.ie