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27 Nov 08: Speech by Paul Kenny at the launch of his 2007 Annual Report

SPEECH BY PAUL KENNY, PENSIONS OMBUDSMAN, at the launch of his Annual Report and Digest of Cases for 2007 27th November, 2008. A Aire, a dhaoine uaisle: Ba mhaith liom buíochas a ghabáil leat-sa, a Aire, as bheith annseo linn inniu, chun an Tuarascáil Bliantúil a láinseáil ar mo shon. Gabhaim buíochas freisin as ucht an chúnaimh agus as na cabhrach a tugtar domsa agus do bhaill foirne uile na hoifige seo, ag muintir na Roinne Ghnóthaí Shóisiailigh agus Teaghlaigh. Go raibh míle maith agaibh go léir. Minister, ladies and gentlemen: It gives me great pleasure to welcome you all here today for the launch of my Annual Report. I wish to put on record here my thanks to the Minister for her unfailing support, but also for the help and support afforded to me and to my staff by the people in the Department of Social & Family Affairs. We truly could not function without that. During 2007, we received 515 new complaints, an increase of 17% over the previous year, and dealt with about 3,600 telephone enquiries – up 16%, We closed 584 files, an increase of 90% over 2006. I have to thank my wonderful colleagues here for the dedication and hard work that brought this about. The present state of the economy and the chaotic situation in the investment markets have meant that 2008 has been even busier. The number of new cases opened in the year to end October is 49% up on the corresponding period last year. Our closure rate is up by about 12%. There is every indication that our workload in 2009 will be heavier again. In the Annual Report there is a section called “what we have learned”. In this I have, as is my custom, drawn attention to a number of issues that presented themselves during the year, since I hope those who deal with pensions issues can learn from the mistakes of the past and bring about improvement in the future. One of the issues I have raised is the apparent unevenness of administration standards in areas of the Public Service. Previously, I had formed the view that this might be due to dispersal or dilution of experience. I am now firmly convinced that this is the case. Pensions knowledge can’t be acquired overnight. I know that, where there is tight control of administration, and where this function is discharged by properly experienced staff, problems tend to be far fewer. I would therefore urge Government to explore how the very considerable fund of pensions knowledge and experience that does exist in the public service might be put to most effective use. Is there a case for some sort of “shared services” arrangement? I was pleased to note an improvement in internal disputes resolution (IDR) in areas of the public service following the intervention of the previous Minister, but there are still some black spots there, and matters that are referred by line Departments to the Department of Finance prolong the process and also increase that Department’s workload very considerably. In the private sector I have been able to dispense with the IDR process in certain cases and this can be very useful, but in many cases the findings of the dispute resolution process can be a valuable starting point for an investigation. I have made some comments on complaint handling in general, and on how many contentious issues could be defused by an apology offered early enough in the process, or by a simple explanation, although I have remarked that “simple” appears to present a challenge to some administrators, which they seem unable to meet. Naturally, - and unfortunately - the old regulars, target benefit schemes and employers in the construction industry, feature again this year. Another source of complaints were pensioners who were mis-sold – or rather, who mis-bought – the SSIA pensions incentive, which really wasn’t intended for them in the first place. The Digest of Cases that is issued with the Annual Report contains details of a number of cases which are representative of the sort of complaints I have received this year. Again, this publication is aimed at increasing the knowledge and learning of those involved in pensions. It can be quite depressing to see the same sort of complaint arising again and again. You will see from the Annual Report that we received over 3,500 telephone calls to the Office in 2007. On the basis of data to end October, our phone calls this year are running over 6% up on last year. Significantly our website hits to end October this year stand at over 282,000, some 27 per cent up on the similar period last year. Many of these calls and hits are people looking for information about pension matters. Many are not sure whether they have a complaint or not. As a consequence, last week we put a whole new section on our website called Frequently Asked Questions which can be accessed from the first or “Home Page” of the website. In the FAQ section we have attempted to answer many of the type of queries which we receive. We have divided the FAQs into four distinct sections
  •  questions about this Office;
  • questions of a general nature;
  • questions specifically relating to private sector pension schemes; and lastly,
  • a section relating to public sector pension schemes.
I would hope that this - what I might call a “database” of information - will be particularly useful to our clients and we will add to it over time. Over the past year, I have been particularly busy and, I am pleased to say, successful in the Courts. Clearly it is in everybody’s interest that the Office deals with complaints as quickly and efficiently as possible. To this end mediation is the preferred route and you will see that one third of cases closed in 2007 were closed by mediation. However, there will probably always be the “hard core” of people who refuse to engage with my Investigators. Some people seem to believe that, if they simply fail to co-operate with my investigators, the problem will go away. It will not. In such cases I have not been slow in applying the full rigour of the law and a look at my website will show the extent of my successes in this area. To bring you right up to date, I can tell you that my Office was involved in three Court hearings in the last eight days. Yesterday week, I secured a criminal conviction under Section 3 (1) (b) of the Pensions Act, 1990 against an employer in Co. Wexford who refused to release payroll records to me. Although he eventually did provide crates of files, he nevertheless received a criminal conviction under the Act and was fined €2,500. Incidentally all of the files which he supplied are now with the Pensions Board who are undertaking a major investigation into his company. Last Friday I had a similar case in Waterford District Court. In this case the employer decided not just to ignore my requests for payroll information, but also to ignore the court. As a result a bench warrant was issued for his arrest last June and he was released on bail till the hearing last Friday. That case is now down for full hearing on December 19th. Lastly, on Monday last I was in Galway Circuit Court where a Galway builder was appealing a criminal conviction and maximum fine of €5,000 and costs for failure to produce payroll records in compliance with an order of Tuam District Court in July last. This is now adjourned to January, when my own application for an enforcement order compelling the gentleman concerned to provide me with information will also be heard. It is beyond me why people risk adding a criminal conviction to whatever remedy I might apply against them. In these cases, the complaints related to alleged deduction of pension contributions and failure to remit to the pension fund. That is no better than theft. A lesser “offence”, would be failure to deduct pension contributions at all. In either case, however, my primary objective is to ensure that the employees and their families are compensated. While mediation is invariably the preferred course, if I go to formal investigation it should be clear to all involved that when I make a request for information under the Pensions Act, respondents have 21 days to comply with this request. I am becoming increasingly concerned at a tendency of late, where people from whom I have requested, in most cases fairly straightforward information, have taken the legal route and replied through their solicitors on the 20th day with a long list of questions around the legal basis for everything to do with my Office, my actions etc. While I have no difficulty in responding immediately setting out very clearly the legal basis for my actions, what appears to be costly delaying tactics are being employed, possibly in the hope that the issue might go away. Again, it will not! And people might find that they face hefty legal bills in addition to whatever Determination I might make. I would appeal to those employers, particularly in the construction industry, not to waste their money trying to delay investigations. They would be far better advised to meet their obligations instead. The record shows that failure to co-operate with my Office will not make us go away and will result in fairly swift court proceedings. I would again remind all concerned that offences against the Pensions Act are criminal offences, and a criminal conviction is not to be taken lightly. Before I finish, I would like to record my thanks for the help and co-operation received from the Financial Services Ombudsman, the Pensions Board, the Financial Regulator and the Office of the Ombudsman, as well as that of the various practitioners and benefit providers whom we have to approach in dealing with our complaints. It is much appreciated. Finally, before presenting this Report formally to the Minister, I would like express my gratitude to you all for being with us here today. Thank you