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23 Mar 2010: Pensions Ombudsman secures further convictions and asks questions of company auditors


·        Pensions Ombudsman secures two further court convictions as Wexford and Waterford builders now have criminal records for not producing documentation.
·       Kenny asks questions of company auditors
Court Cases:
Following complaints received from former employees that their employers had deducted pension contributions from their wages but failed to remit the deductions to the relevant pension scheme, the Pensions Ombudsman Mr Paul Kenny sought to investigate. However, he was met with continued refusal to supply payroll documentation.
"Because I equate the deduction and non-remittance of pension contributions wages to theft, I am not prepared to be obstructed in such investigations. Consequently I have no hesitation in pursuing those who seek to obstruct my investigation through the courts" said Mr Kenny.
The companies in question were Thomas White & Son (Construction) Ltd of Ballydemock, Newbawn, Co. Wexford and Melcarne Developments Ltd of Grannagh Business Complex, Grannagh, Waterford.
In Wexford District Court on 16 March, 2010, Mr. Thomas White was fined €2,500 and ordered to pay costs of €1,852, and in Waterford District Court on 18 March, 2010, Mr Michael Walsh and Mr Liam Walsh, directors of Melcarne Developments Ltd were each fined €1,000 and ordered to pay €2215 in costs, both cases arose from failure to comply with a request under Section 137 of the Pensions Act, 1990 (as amended) from the Pensions Ombudsman to provide documentation relating to pension deductions.
Commenting on the cases, Mr Kenny said that his investigators will not be frustrated in their investigations by people who ignore requests for the type of basic payroll documentation held by any reputable company. "Failure to provide me with the documentation I required has meant that these three men now have criminal convictions and have had to pay fines and costs of over €8,500, not to mention their own legal costs. In the end they actually provided me with the documentation I required but, unfortunately for them, too late to stop the legal process which had been put in train. I find it difficult to understand the motivation behind such actions. I have said time and time again, and the media has reported, that I will not be put off by prevarication or obstruction in the course of my enquiries" he said.
Mr Kenny also pointed to the responsibility of auditors in cases where pension deductions have been made from wages and not remitted to pension schemes. "In auditing and signing off accounts, auditors must examine payroll documentation to ensure compliance with taxation and social welfare codes such as PRSI and PAYE. If deductions have been made from the wages of employees representing their contributions to a pension scheme, there should be a corresponding remittance to the trustees of that scheme. At the time of annual audit, where such deductions are clearly outstanding, not having been paid over to the pension scheme within the time limit set down in the Pensions Act, the accounts should show the pension scheme as being a creditor. In the final analysis, the auditor is certifying that the accounts are a true and fair representation of the financial state of the company at the time of audit. 
“Unremitted contributions do not belong to the employer and should not be treated as the working capital. Not only is that misappropriation but, if the employer later goes out of business, it may amount to theft. In any event, failure to remit contributions within the time limits prescribed by the Pensions Act is a criminal offence, which directors and officers of companies, as well as the companies themselves can be prosecuted. I will be paying particular attention to this aspect of a company’s documentation in the future and will not hesitate to contact the appropriate authorities if I have particular concerns" he said.
For further information contact Mr. Paul Kenny, Pensions Ombudsman at (01) 647 1650, or see
23rd March, 2010