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13 Sep 06: Speech Pensions Ombudsman at Launch of the Annual Report for 2005.

A Aire, a dhaoine uaisle:
Tá áthas mór orm fáilte a chur romhaibh go léir inniu. Ba maith liom buíochas a ghabháil leatsa, a Aire, as teacht annseo chun an Tuarascáil Bhliantúil a láinséail ar mo shon. ‘Sí 2005 an tarna bhliain iomlán ina raibh m’oifig-se i mbun oibre, agus is cúis áthais dom an tuarascáil seo a chur os do chomhair, agus os comhair an Oireachtais.

Minister, ladies and gentlemen: it gives me great pleasure to welcome you to the launch of the Annual Report for 2005, the second full year of operation of my office. I am grateful to you, Minister, for taking time out from your busy schedule to be with us today, and I wish to say that I and my staff value the support that you have always shown for us since you took office.
The office came into formal existence at the end of April 2003; the regulations which enabled me to conduct investigations were put into place in September of that year. The first Annual Report covered the part-year 2003 as well as the full year 2004. The year 2005, which is covered by the present Report, was the first in which we had our full complement of staff.
I mentioned last year that trade was quite brisk. In 2005 it was even more so. In terms of overall numbers, 2004 saw 297 files opened. We carried forward 287 into 2005. The number of new files opened last year was 389. We closed 385 during the year and finished up with 291 going forward into 2006. To the end of August this year, the total of new files opened is 289. There were 2375 telephone enquiries last year. To the end of August this year, 2001 were received. We expect a little over 3000 for the full year.
In 2004, 23 determinations were made (and only 7 complaints were upheld). The figures for 2005 are 76, of which 24 were upheld – that’s only thirty-two per cent. But a further 146 cases were settled by mediation –95 of these ended in some concession to the complainant. In 2005 overall, therefore, 119 cases, or 53% of the total decided, resulted in some award to the complainant. Not all
successful cases involve compensation, or money changing hands. Sometimes, it is enough for a complainant to receive an apology, some acknowledgement that the system has somehow failed them.
Those of you who have been doing the mental arithmetic must realise that the settled cases are not the end of it all. Forty-three cases were disposed of with general advice, or were withdrawn before investigation. Ninety-three were outside my terms of reference, either because they were out of time or referred to something outside my jurisdiction. Of these, 32 were forwarded to another Ombudsman or a regulator for attention. Twenty-eight complainants who were referred for internal disputes resolution never came back – hopefully because they had their problems solved by the IDR process.
There were two complaints to me about PRSAs – an increase of two over the previous year.
Vetting complaints and finding a home for them if they don’t belong to us can be a time-consuming business, but it is necessary, so that the consumer is not left high and dry, but directed to someone who may be able to help. I am pleased to have signed a Memorandum of Understanding with the Financial Regulator and the Financial Services Ombudsman, which documents the co-operative relationship we have. They are just as happy to forward complaints to me, as I am to them!
A similar Memorandum is about to be signed with the Pensions Board, with whom I have been exchanging complaints since I took office.
I have spoken about redress, and the different forms it may take. I am limited to compensating for financial loss. I can’t make any award for frustration, inconvenience and suffering generally. I sometimes wish I could. I have mentioned in the digest of cases a particularly nasty one, in which a widow in a vulnerable position was treated in a particularly mean-spirited way, by a well-known firm whose main objective seemed to be to protect its own back at the consumer’s expense. I mentioned that it is cases like these which may lead me to review my policy of not naming those involved.
One category which will be named are those against whom enforcement orders will be sought. At present we have two cases where the respondents have not complied with my determinations. I am adamant that they will not get away with this, and Court orders will be sought against the people concerned.
I expressed concern last year that the average time it takes to process a case was getting longer. In 2005 it was longer still. This is partly due to the volume of work, but partly to the complexity of the
problems that we have to deal with. The very considerable volume of work outside the area of pure investigation is also tending to suffer This includes the general management of the business, training, managing publications, compliance with legislation and with standards for Public Sector bodies. Even a seemingly simple task such as preparing a customer Charter is time-consuming, if it is to be done properly. All this places demands on our time and resources. There is no doubt that additional staff are needed and I will be addressing this issue with you, Minister, in the near future.
One of the most valuable features of an office like this is the opportunity to learn from the complaints we consider, and to pass on what we learn to those who can help to improve the situation - the Minister and the Department of Social and Family Affairs, the Pensions Board, the Financial Regulator, the Department of Finance and the Revenue Commissioners. I have highlighted a number of issues in the Annual Report, indicating areas where change is needed in my own terms of reference, or matters requiring attention from employers, administrators, trustees and others.
The first area concerns the operation of Internal Disputes Resolution, or IDR. I mention this in the current report as an ongoing problem, but I am very pleased to say that the Minister heard what I had to say on the subject last year, and introduced reforms earlier this year, to enable me to deal with inordinate delays in completing the process, or situations where it is inappropriate to do so. I thank you, Minister for those reforms. Incidentally, I mentioned the Education & Health sectors as offenders last year. I am pleased to say that things have improved in these sectors, although the change is slow in places.
I mention one aspect of IDR that is still a problem – this is where complaints are sent for IDR which are not really pensions issues, but are problems arising from employment contracts or aspects of employee-employer relations – and which are disguised as pension problems. Those complaints cannot be solved by me – but they can, and do, cost this office a lot of time before we can identify the true nature of these complaints.
In my report I have welcomed the introduction of civil penalties for breaches of the Pensions Act. I am still awaiting the implementation of the civil penalties regime, which I believe to be important, as much for its deterrent effect as for its punitive value.
In the body of this year’s report I have mentioned a number of issues, such as the reasons why I will not allow a complaint to be withdrawn once an investigation has begun; the abuse of Section 48 of the Pensions Act by unscrupulous employers and trustees, which I have referred to your Department;
and matters which I have referred to the Financial Regulator, such as minimum incremental premiums and ongoing charges levied against small frozen benefits. I hope that these interventions will have beneficial results for the consumers of financial services.
Last year, I mentioned the Construction Federation Operatives’ Pension scheme as one of my best customers. That hasn’t changed. There are still depressing numbers of complaints about the failure of employers to register members or to pay contributions; and, worst of all, the theft by employers of contributions that have been deducted and not remitted to the pension scheme. I mention the problem of the large numbers of allegedly self-employed workers in this industry and the difficulties posed by a Labour Court ruling late last year. This particular issue is under ongoing discussion with the relevant Government agencies. I mention the need to clarify the position of companies which describe themselves as employment agencies – that issue needs to be addressed by the Department of Enterprise, Trade and Employment.
The Operatives’ scheme is now in the process of being replaced by the new Construction Workers’ Pension Scheme which started on the 1st July. There were rumours going about that, if an employer who had defaulted on the old scheme could just hang on until it was replaced, he could get away without paying arrears that might be due. I am warning everybody today – that is not the case, and every complaint of arrears will be followed up and dealt with, however long that may take – and for technical reasons to do with actuarial values, they could end up paying more than they would now.
The 2005 Annual report has a number of things to say about Public Service pensions. Issues arose such as abatement of pensions for pensioners who become re-employed after retirement. The Department of Health and Children was asked to reform its practices in this area. I mention the “information gap” that I believe exists in relation to public sector schemes generally. It is relatively easy for public servants to access a facility to calculate their entitlements, thanks to the Department of Finance website. What is not so easy is for them to get information, about buying back service, transferability of previous service, when it compulsory to buy back previous service, and so on. Basic information that people should get on joining employment is often not made available. As a result, it often happens that options are no longer available when they finally do get information, or the exercise of options has become very much more expensive in the meantime.
I have also sounded a note of caution about the widespread use of administrative circulars, not just to impart information, but sometimes to direct and therefore limit the exercise of powers that are supposed to be discretionary. Worst of all, they are sometimes used as a substitute for changing the
rules of schemes. That is a practice that is unacceptable, and a simple method of amending scheme rules needs to be found.
Leaving aside public service matters, I have also mentioned the urgent need to regulate the provision of employer-sponsored prolonged disability insurance schemes – often called Income Continuance Plans. A great deal has been said and written this year about these plans. They are the last unregulated area of employee benefits, where there is no right to information and no means of redress for maladministration. I have asked that urgent consideration be given to how these plans are to be regulated.
In conclusion, Minister, I wish to thank you and the senior staff of your Department – in particular, the Secretary General, John Hynes, Alice O’Flynn, Anne Vaughan, Paul Cunningham and Geraldine Gleeson, who has now moved on from the Planning Unit; Finbarr Hickey and Dave Keogh , as well as staff in Accounts, Facilities Management, Personnel and IS Services – for the invaluable support that I have received in establishing this Office and in its ongoing operation. I hope you regard it as money well spent. And lastly, I also wish to thank my most valuable asset - my own staff. I wish to record my own appreciation of their incredible ability to multi-task – badly needed in I very small office – and their dedication, all-round hard work and patience they have shown in supporting me and in making sure that complainants who come to this office are treated sympathetically and fairly