Board pursues 546 firms flouting PRSA rules

The Pensions Board is pursuing more than 500 employers who acknowledge they have failed to provide access to pensions for their employees.

The 546 employers are among those who replied to Pensions Board requests for information last year. The board sent 64,000 letters to employers who had failed to sign up with a PRSA provider a year after new legislation obliged them to do so.

The board, which regulates the pensions industry in Ireland, received 32,363 replies but says that, of these, only 546 have yet to comply with the law - now in effect for 18 months.

Employers who flout the legislation have been warned that they are committing a criminal offence that could result in a fine of up to €12,700 and/or up to two years' imprisonment.

Aside from the 546 employers who face prosecution, the board is chasing up a further 31,600 businesses that are registered with the Revenue but have yet to respond at all to the board.

Figures yesterday show that PRSAs are still struggling to find acceptance two years after their introduction. Only 50,796 PRSA contracts had been sold at the end of March, just over 22,000 of them in schemes set up by 71,634 employers.

Staff at only one in 10 of those employers who have made a PRSA option available are making contributions to the accounts. Pensions Board chief executive Anne Maher has made no secret of her disappointment at the slow take-up of the scheme.

This week, she expressed her concern at the number of "shell" PRSAs in existence - employers who offer staff the option to open a pension but where there has been no take-up.

"It is not enough to just notify employees that the company has a PRSA provider if they so wish," she said. "We would encourage employers to take the initiative during National Pensions Action Week to make these shell PRSA schemes active."

She indicated that the Pensions Board had considered forcing employers to contribute to their staff's PRSA accounts the PRSI payments they save on employee contributions to the scheme. However, the idea was shelved amid fears that the cost of enforcing such a rule would outweigh the financial benefit.

Those who are availing of PRSAs are opting generally for the low-cost standard product, which accounts for 80 per cent of all PRSAs sold.

Data from the Pensions Board indicates that PRSAs are proving most popular among younger workers - the target group for the board's recent pension awareness campaigns.

Workers between the ages of 25 and 44 account for 70 per cent of all contributions into the accounts.