Employers flouting regulations governing pension schemes could from next week be hit with tough on-the-spot fines as an alternative to prosecution, it emerged today.
The new system was officially launched by Minister for Social Affairs Martin Cullen, who visited the Pensions Board this morning to highlight the consequences of breaching provisions of the ensions Act.
It sets standards for employers and trustees of schemes providing occupational pensions and PRSAs (Personal Retirement Savings Accounts).
Mr Cullen said the €2,000 fine for minor breaches together with prosecution for more serious infringements would help the Board ensure the Act is fully complied with.
"The Pensions Board is active in encouraging private pension uptake, persuading people to save for their retirement.
"We need therefore to ensure that when people do take that step and start putting in place their own pension plan that the provisions of the Pensions Act are complied with and that the rights of the scheme member are safeguarded," he said.
The fines come into effect on Monday. It is estimated that trustees and employers look after around €90 billion worth of pensions on behalf of 900,000 people nationwide.
While prosecution remains in place for serious breaches of the Act, minor infringements could be dealt with outside of the courts via the fines system. Samples of such offences include failure by employers to supply the correct documentation showing they have put in place a pension or PRSA scheme for employees with more than six months service.
Failure by a trustee to comply with requirements over the preparation and auditing of annual accounts would also be punishable. Under the fines provision, the Board would notify a person in writing over an alleged offence. If within 21 days of the notice the fine is paid, prosecution will not be pursued.
"Prosecution procedures will continue to apply for more serious breaches of the Act," Mr Cullen said. "However, for certain and less serious offences the person alleged to have breached the Act will be given the option of not going to court but instead will be required to remedy the breach and pay a fine.
"In this regard, on-the-spot fines will provide for a more efficient and proportionate response to less serious breaches of the Act," he added. The Board today published a check-list to make trustees and employers aware of the Act's provisions they must comply with.
PA