Pensions Board may prosecute six firms

The Pensions Board is considering prosecuting six companies who have not complied with legislation requiring them to give their employees access to pensions and who have failed to respond to the board's investigations.

The statutory body responsible for monitoring pension schemes and Personal Retirement Savings Accounts (PRSAs) expects to take the first prosecutions for non-compliance with the access rules by year's end.

Since September 15th, 2003, employers have been obliged to offer employees excluded from any occupational scheme after more than six months' service access to a PRSA - a type of portable personal pension designed to help the Government increase the number of workers who are not solely relying on State pensions for their retirement income.

However, figures released by the Pensions Board yesterday show that out of 170,000 registered employers, just under 62,000 employers have appointed a PRSA provider.

Ms Anne Maher, chief executive of the Pensions Board, said monitoring employers' obligations to provide access to pensions continued to be "a high priority" and the board would step up its activity in this area for the remainder of the year.

The Pensions Board is encouraging employees without a pension to ask their employer about access to one.

The board operates a lo-call phone line at 1890 656 565 where people can report employers for non-compliance.

Ms Maher said the latest figures showed that where employers have signed up to a PRSA provider, there has been an increased effort on the part of the 10 providers, which are mostly insurance companies, to get employees to save for retirement.

Some 16,048 employees are now contributing through payroll deductions under 5,251 employer-designated PRSAs, according to figures for up to the end of June.

This compares with 12,464 PRSAs that had been activated under 4,050 employer designations by the end of March. But the figures mean that no pension contributions are being made to almost 92 per cent of employer-designated PRSAs.

When individuals such as self-employed people and homemakers are included, the number of PRSA contracts sold has surpassed the 30,000 mark, standing at 32,920 at the end of June.

Around 54,000 people have also joined occupational schemes either this year or last year.

However, roughly 300,000 people need to take out a pension if the Government is to achieve its target of increasing the proportion of workers with their own pension from 50 to 70 per cent.

The total value of the assets held in the PRSAs stood at €83.6 million as of June 30th.

Age Action Ireland has welcomed a proposal by the Irish Insurance Federation (IIF) to introduce pensions for children.

"The IIF is right to stress the need to get young people, including students, into the pensions arena and we fully support the idea that the Government should consider opening a pension account for each of the 1.1 million children in the country, and deposit €10 a month in it until they turn 18," said Mr Paul Murray of Age Action.

"While the IIF is obviously anxious to extend business for its members, AAI welcomes proposals which help ameliorate the pension provision shortfall," he said.