Errors in the administration of the staff pension fund at the EBS Building Society have been admitted by Irish Pensions Trust Ltd (IPT).

Errors which have concerned the trustees of the staff fund include the payment of a pension from the staff fund to a person who was not a member of that fund between June, 1993 and January, 1995.

The money involved - £78,776 before interest - was not repaid to the staff pension fund until September, 1996. Interest on the payments - £31,969 - was not refunded to the staff fund until July, 1997.

In addition, some £25,594 plus interest of £16,000 charged for staff life assurance cover had to be transferred in 1996 back into the staff fund.

In 1994, auditors Ernst and Young identified the pension payments as being paid from the wrong fund in its audit of the 1993 annual accounts. The incorrect payments followed the splitting up of the original pension fund into a staff fund and a managers' fund. The payments should have come from the managers' pension fund, but instead were taken from the staff fund.

IPT was again informed of the error by the auditors when they were completing the 1994 and 1995 audits. In a letter to the trustees of the staff pension fund in August this year, IPT accepted that it was "at fault in this matter" and apologised "for this error". Other errors in the management of the fund involve the charging of fees to the staff pension fund instead of the pension fund for managers, employer contributions listed as employee contributions and mis-stated pension payments. IPT said that when errors were discovered they "were rectified at no cost to the fund".

The newly-appointed chairman of the pension fund trustees, solicitor Mr Gary Byrne, is understood to have proposed at a meeting of the trustees yesterday that an independent audit of the administration of the fund be carried out "in the immediate future". That audit is expected to be backdated to January 1st, 1991. According to documents seen by The Irish Times he proposed that all the trustees be provided with all information and documentation which they are entitled to "without further delay".

In a statement issued after the meeting, the trustees said that "in order to allay any concern of members" they had decided to appoint an independent accountant to carry out a review of the administration of the scheme.

The terms of reference for the review will be agreed at the next meeting of the trustees which is expected to take place early next month. The trustees stressed that the scheme was a defined benefit scheme which was fully funded and said there had been no losses to members. It is understood that the member trustee of the staff fund who joined the board of trustees in September, 1994, had raised concerns about these issues for some time. She was advised by the Pensions Board to take legal advice. She sought advice from the Pensions Board alleging that material information was withheld/concealed from her as a trustee and that she was unable to get the information she requested.

When she asked about the delay in completing the audit report on the pension fund's 1995 accounts she said she was told by IPT that the auditors were "being fussy and asking too many questions".

When the same delay occurred in 1996 she said she "became suspicious" and asked to see the correspondence covering the audit.

When this was refused she approached the Pensions Board. She was advised to seek legal advice. She is being advised by Arthur Cox Solicitors. She confirmed to The Irish Times that she made a report to the Pensions Board and is awaiting the outcome of its examination. The union representing EBS staff, MSF, has appointed Daniel Spring & Co Solicitors to act on behalf of the members of the fund. Mr Spring declined to comment.

The MSF union committee at EBS has advised its members to request a copy of the annual report on the pension fund for 1996 from the EBS human relations department. The MSF committee at the EBS declined to comment stating that it was "an in-house problem that is being sorted out at the moment". Under section 7 of the annual report entitled "administration matters" it stated that in March, 1997, the trustees became aware that Ernst & Young had written to IPT in August, 1996, regarding the preparation of the accounts for 1995.

"At the time of its receipt and for six months thereafter, IPT failed to advise the trustees of the existence of what the trustees consider a significant letter", the report states.

The comment is understood to refer to a "management letter" from the auditors to IPT criticising IPT's administration of the fund and that the pension paid in error had not been refunded to the staff pension fund. But the letter was not made available to the trustees. In its 1995 audit of the fund Ernst & Young discovered that "a considerable number of errors" had been made by IPT in preparing the accounts.

These included erroneous transcription from the records into the annual accounts including:

employer contributions listed as employee contributions and vice versa,

transfer to and from schemes omitted, and

pension payments mis-stated.

The report stated that "after a considerable amount of time and effort the auditors queries were satisfactorily answered and the 1995 accounts were approved". The auditors informed the trustees that these errors did not have any adverse impact on the financial position of the plan but said that the administrators "should provide a very high standard of service". At that time it was decided that the trustees would report to the members each year on the performance of IPT as administrators.

Ernst and Young reported that there had been "significant" improvement in the quality of accounts prepared by IPT from 1996.

A letter from the union committee to the pension fund trustees dated July 3rd and seen by The Irish Times stated that "a number of matters concerning the administration and operation of the above (EBS staff pension) scheme have given us cause for serious concern". The letter requested an urgent meeting with the trustees.

The EBS staff pension funds has 280 members and net assets of about £17 million. In a statement yesterday EBS expressed concern that the errors had occurred in administration of the fund. It pointed out that the administration of the EBS pension funds "is the responsibility of IPT Ltd".

The errors were corrected and the funds were restored to their proper position, the society said. "EBS confirms that these errors caused no adverse impact to the financial position of the staff pension fund," it said.