A number of employers who are failing to provide access to pensions for their employees are to face a number of landmark prosecutions early next year. Carl O'Brien reports.
The prosecutions could have implications for thousands of employers who are defying their legal obligation to allow staff to open a Personal Retirement Savings Account (PRSA) at work.
A PRSA is a new model of flexible pension designed for self-employed people, unemployed people, homemakers, carers and any employee who is not a member of an occupational pension scheme.
More than one year after the deadline for employers to allow staff to open these pensions through their place of work, latest figures show almost half of employers, or 64,000, have failed to do so.
The Pensions Board has expressed particular concern about the availability of PRSAs to workers in small firms, notably in the hospitality, retail and farming sectors where there is a high proportion of part-time and seasonal employees.
The Pensions Board has issued legal proceedings against seven employers which have failed to co-operate with inquiries to determine whether they are offering access to the pensions. The cases are due to be heard before the District Court next January.
Failure to provide access to the pensions is a criminal offence that may result in a fine of up to €12,700 and/or up to two years' imprisonment.
Under legislation that came into effect in September 2003, if an employee is excluded from an occupational pension scheme after more than six months' service, the employer must appoint a PRSA provider and deduct contributions from payroll at the employee's request.
Ms Mary Hatch, head of information and training at the Pensions Board, said it was likely there would be further prosecutions if employers continued to flout their legal obligations.
"We take this very seriously. The obligation has been there since September 2003. A booklet was sent out to all 174,000 employers. Everyone was aware of their obligations," she said.
Pensions Board and Department of Social and Family Affairs officials are examining around 8,000 businesses a year to determine whether they are providing access to PRSAs.
There is also provision for employees, or whistle-blowers, to report their employers for non-compliance on a lo-call phone line at 1890 656 565.
While almost half of employers have provided access to PRSAs, take-up among employees is still low. Only 18,117 employees at less than 10 per cent of the companies that have established a PRSA option are availing of it and making contributions.