In July 2008 the Labour Court recommended that an agreed pension scheme should be introduced for Community Employment (CE) scheme supervisors and assistant supervisors, and that such a scheme should be adequately funded by FÁS (LCR19293). It must also be noted that the employer in this situation is the sponsoring organisation and not FÁS (or the Department of Social Protection, which now have responsibility for CE).
The annual cost of introducing a defined contribution scheme for CE Supervisors was estimated at €3.75m in 2008. Therefore, in line with good accrual accounting practice, a one-year provision for the pension claim was made in the FÁS accounts should the debt materialise. This was prior to discussions with the Department of Finance, the Department of Enterprise, Trade & Employment and the CE Supervisors’ Union Representatives. No subsequent provisions were made following these discussions.
The method of accounting used in FÁS is the Accrual Accounting method which recognises potential economic events regardless of when the actual cash transaction occurs. This meant that the accrual of €3.75m in 2008 for CE supervisor pensions was simply a provision for an event that may occur (i.e. no actual cash was transacted). After transfer of responsibility for the Community Employment programme to the Department of Social Protection in October 2010 this accrual had to be reversed as the Department of Social Protection works under the Cash Accounting method. This was carried out in the 2011 accounts for CE, as recorded in the published document.
