PENSION funds for more than 200,000 employees of companies in the State will enjoy greater protection due to new "whistle blowing" provisions of the 1996 P50S Act. Guidelines on how the Act will operate were published yesterday by the Pensions, Board.
Under the Act, trustees of schemes and any "relevant person" providing a service to the trustees will be obliged to report suspected fraud or misappropriation of pension funds. A "relevant person" includes professionals such as auditors, actuaries, and lawyers, but it also covers insurance intermediaries, investment firms or non professionals such as clerical staff who suspect funds are being mishandled.
The legislation provides protection for whistle blowers from unfair dismissal or defamation proceedings. For those who fail to report irregularities, however, the penalties include fines of up to £10,000 and two years imprisonment.
The Act goes much further than its British counterpart, which only applies to actuaries and auditors and does not come into force until April, 1997. The Irish regulations have immediate effect.
The Minister for Social Welfare, Mr De Rossa, introduced compulsory reporting despite opposition from the insurance industry. Welcoming the publication of the guidelines yesterday, he said that after detailed consultation with the Pensions Board, "I decided that on balance, in order to provide maximum protection to scheme members, the mandatory road was the best one to travel.
"But I hope, of course, that this section will never need to be used."
The chief executive of the Pensions Board, Ms Anne Maher, described the Act as "a burglar alarm to protect pensions. The whistle blowing measures are an additional safeguard to existing ones".
Since it was set up five years ago, the board has investigated a number of pension funds, mainly for not making adequate provision to meet future commitments to members. Of a total of 114 schemes which failed to provide actuarial certificates that they were adequately funded, action had to be initiated against 24 before full compliance was achieved.
At present, the board is vetting four new schemes to ensure they comply with funding standards.
If the board uncovers a prima facie case of malpractice as the result of a whistle blower report it will refer its findings to the Garda Bureau of Fraud Investigations, which will then take over the case.