Wednesday, 10 March 2004

Ceisteanna (73, 74)

Jan O'Sullivan


128 Ms O’Sullivan asked the Minister for Social and Family Affairs if her attention has been drawn to concerns expressed by construction workers that construction firms have been cheating their employees out of up to €80 million per year in unpaid pension contributions; if she has satisfied herself that there are sufficient legal protections in place to ensure proper monitoring of such pension payments; and if she will make a statement on the matter. [7820/04]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Minister for Family)

The construction federation operatives pension scheme, CFOPS, was founded in 1965 by employers who were registered with the Construction Industry Federation, CIF, to provide pension and mortality benefit for workers in the construction industry. The terms of the registered employment agreement for the construction industry, relating to pensions, life assurance and sick pay, were registered with the Labour Court on 7 March 1969 under the Industrial Relations Acts 1946-69. As a result of this agreement it became compulsory for all employers in the construction industry to provide pension and mortality benefit for all manual workers.

Generally, the enforcement of the registered employment agreement is a matter for the Labour Court under the Industrial Relations Acts. Any changes in this regard would be a matter for my colleague, the Minister for Enterprise, Trade and Employment. The Pensions Board only has a role with regard to the CFOPS where breaches of the Pensions Act are involved. It is an offence under the Pensions Act for an employer not to remit contributions deducted from employees to a pension scheme. In this regard, in September 2003 the Pensions Board received a complaint from the trustees of the CFOPS that a large number of employers were considered to be in arrears with regard to the remittance of employee contributions. These cases are at present being followed up in consultation with the trustees. It is also open to beneficiaries or potential beneficiaries of the CFOPS, who consider that they have sustained losses because of maladministration by the administrators of the scheme, or an employer to make a complaint to the pensions ombudsman.

I am satisfied that there are sufficient powers available to the Pensions Board and the pensions ombudsman under the Pensions Act to deal with employers who may be withholding employee contributions to the CFOPS. I understand that the board is in contact with other regulatory bodies with an interest in this area to ensure that all powers and avenues are used to the fullest extent possible to address the current problems. If gaps in the current overall regulatory process emerge, these will be brought to the attention of the relevant Minister by the board.

Question No. 129 answered with QuestionNo. 99.

Kathleen Lynch


130 Ms Lynch asked the Minister for Social and Family Affairs the number of persons in receipt of a State pension; her Department’s assessment of the numbers of persons likely to be in receipt of it over the next decade and the provisions that are being made in that regard; and if she will make a statement on the matter. [7814/04]

Amharc ar fhreagra

At the end of December 2003 there were 200,479 people receiving an old age contributory or retirement pension and 86,733 receiving an old age non-contributory pension. An actuarial review of the social insurance fund, undertaken on behalf of my Department in 2002, projected that the number of recipients of the old age contributory and retirement pensions will increase to 255,000 by 2011 and 321,000 by 2016. To some extent the increase will be balanced by a reduction in the number of people receiving an old age non-contributory pension. The numbers receiving this pension have declined by over 20% in the past decade and reflects improved social insurance coverage and increased labour force participation, particularly amongst women.

In common with other European countries, the population of Ireland is ageing as a result of a combination of increasing life expectancy and a declining birth rate. The decline in the birth rate is relatively recent and, coupled with the effects of high emigration for much of the period up to the 1990s, has resulted in Ireland having the lowest proportion of older people in the EU at 11.2% aged 65 and over. The current EU average of 16.1%.

The proportion of older people in Ireland will remain at broadly the same level for the next ten years after which it is projected to increase rapidly to 15% in 2021, 19% in 2031 and 28% in 2056. A similar situation exists for the number of pensioners relative to the numbers at work.

Ageing presents the same challenge to Ireland in meeting growing pension costs as to other countries except that we have a longer period to prepare for its full impact. The population projections suggest that no special measures are required in the timescale envisaged by the Deputy. The Government is making preparations through the national pensions reserve fund to part fund State pensions costs from 2025 onwards.

Pensions have been an important issue at EU level in recent years. This is not surprising given that the challenges facing pensions systems are more immediate for other member states. The EU has assessed national pensions systems under agreed objectives in the area of adequacy, financial sustainability and modernisation. A joint EU Commission and Council report was published in 2003. It found that Ireland has made good progress in ensuring the financial sustainability and adequacy of our pensions system.

The report concluded that our system appears to be, in broad terms, financially sustainable despite projected major increases in future pensions expenditure. The matter will be kept under review.