IRELAND - Paul Kenny, the Pensions Ombudsman, has warned he intends to place more focus on the actions of auditors when signing off financial accounts in cases where companies have failed to pass on pension contributions deducted from employees' wages.
The Pension Ombudsman pointed out that auditors must examine payroll documentation when carrying out their work, to ensure the company has complied with taxation and social welfare codes such as PRSI and PAYE.
Therefore, if pension deductions have been made from the wages of employees there should be a corresponding remittance to the pension scheme, and if these deductions are still outstanding at the annual audit the accounts should show the pension scheme as a creditor.
Kenny warned: "In the final analysis, the auditor is certifying that the accounts are a true and fair representation of the financial state of the company at the time of audit. Unremitted contributions do not belong to the employer and should not be treated as the working capital. Not only is that misappropriation but, if the employer later goes out of business, it may amount to theft."
"I will be paying particular attention to this aspect of a company's documentation in the future and will not hesitate to contact the appropriate authorities if I have particular concerns," he added.
He highlighted that failure to remit contributions within the time limits prescribed by the Pensions Act is a criminal offence, for which directors and officers of companies, as well as the companies themselves can be prosecuted.
Kenny has already prosecuted a number of cases related to investigations into allegations of failure to remit contributions, particularly with regard to the compulsory Construction Workers' Pension Scheme (CWPS). For example the directors of two more construction companies - Thomas White & Son and Melcarne Developments - were convicted and fined a total of more than €8,500 by the Irish courts last week for failing to provide payroll documentation in relation to an Ombudsman investigation.
Kenny said: "Because I equate the deduction and non-remittance of pension contributions wages to theft, I am not prepared to be obstructed in such investigations. Consequently I have no hesitation in pursuing those who seek to obstruct my investigation through the courts."
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