Pension scheme `bounty hunting' is condemned

The "bounty hunting" system used to monitor compliance with the construction industry pension scheme has been condemned as ineffective…

The "bounty hunting" system used to monitor compliance with the construction industry pension scheme has been condemned as ineffective and a cause of bad industrial relations in a joint union-employer investigation team.

The pension scheme covers only about 40,000 operatives out of more than 140,000 people involved in the construction industry, and over £350,000 was paid out in "bounties" to unions last month.

The CIF pension scheme administrator, Mr Pat Ferguson, said yesterday the report was only a discussion document. It would be up to the unions and employers to decide if the findings should be acted upon. He estimated 60 per cent of eligible building workers were in the scheme and said the level of compliance was falling because the industry was expanding so rapidly.

A spokesman for the Dublin Alliance of General Construction Operatives, Mr Darren McGuinness, said the report was "a major step forward for construction workers and we hope the unions will support the broad thrust of the recommendations. We don't believe the cost of the monitoring system can be justified any longer."

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The "bounty" system allows unions to claim £350 each time one of its nominated representatives identifies a building worker on a site who is outside the construction industry pension scheme for general operatives. The agency then begins deductions from the employer and employee concerned.

Details of the payments are not published but monthly returns seen by The Irish Times show "bounty" payments were £31,400 in August and £35,650 in September. This is over 50 per cent more than monthly payments a year earlier.

On this basis the annualised "bounty bill" would be well over £350,000. Premium income from the pension scheme last year was £18.6 million but is expected to rise to £20 million this year.

The monitoring system is unpopular with many building workers because union officers cannot look into grievances over pay and conditions when carrying out the "mono", as it is called.

Although defenders of the monitoring system claimed the large sums paid out to unions have increased participation rates, the report has found the opposite to be true.

"There is now a higher level of non-compliance in the industry than ever before," it states. "Regrettably this must indicate that the current compliance systems as operated do not work.

"The monitoring agency has not been, and cannot, or will never be a universally successful instrument in combating non-compliance," it adds. It was a "tolerated but not a wholly acceptable institution by either employers or trade unions".

"Arrears and timely collection of deductions are an ongoing major headache for the trustees of the scheme. This calls for urgent remedial action," it concludes.

It recommends that the monitoring agency be discontinued. A new authority should be put in its place, it says, to be known as the Pensions Compliance and Promotion Authority.

"This authority should be jointly constituted by the CIF [Construction Industry Federation] and ICTU [Irish Congress of Trade Unions] and consist of a chief executive and six trained and qualified compliance inspectors. It should have a joint role of promotion and compliance."

The report advocates new powers for the authority which would allow it "to carry out compliance audits on all firms subject to the registered agreement" for the industry. It says these audits should not be restricted, as at present, to smaller construction firms which are not affiliated to the CIF.

The funds of the Monitoring Agency should be transferred to CIF Holdings, it says. The directors of this company are the trustees of the Operatives' Pension Scheme equally representing the employer and trade union bodies.

While the scheme has been strongly defended by construction industry unions because of the large amounts they receive, the report found it was perceived as "unfair" by many building workers. "A pension scheme for construction workers that is seen to work on a level playing field, fair to all, will be a major factor in bringing peace and harmony to the construction industry into the future."

It also found that "many employer members feel harassed and coerced by visits from CIF inspectors to check compliance levels".