Kathleen Lynch (Cork North Central, Labour)
Link to this: Individually | In context

Question 14: To ask the Minister for Social and Family Affairs the steps he will take to address continuing concerns regarding the reported large-scale abuse of the construction industry pension scheme; and if he will make a statement on the matter. [30949/05]

Séamus Brennan (Dublin South, Fianna Fail)
Link to this: Individually | In context

The Construction Federation operatives pensions scheme operates as a registered employment agreement under the Industrial Relations Acts. There is a statutory obligation on employers to register eligible employees in the scheme and to pay the necessary contributions.

Compliance with the terms of the scheme is enforced through the Construction Industry Monitoring Agency, the Labour Court and the Department of Enterprise Trade and Employment. The Pensions Board also has a role in relation to the scheme in so far as compliance with the various aspects of the Pensions Act are concerned. However, the main difficulties with the scheme relate to failure to register employees and-or to deduct contributions to the scheme and these issues are a matter for the Construction Industry Monitoring Agency, the Labour Court and the Department of Enterprise Trade and Employment.

The Pensions Board has a very limited role in ensuring compliance with the scheme in question. However, because of ongoing controversy in relation to the scheme and compliance with its terms, the board recently facilitated a report on the scheme in conjunction with the Department of Enterprise Trade and Employment.

The report was undertaken by Mercer and it found that 80% of the estimated 80,000 eligible employees in the industry are covered by the scheme. However, the report does highlight the fact that an estimated 70,000 operatives are classed as self-employed and are therefore not eligible to join the scheme.

Mercer has made a range of recommendations designed to improve compliance with the scheme involving my Department, the Department of Enterprise, Trade and Employment, the Department of Finance and the Revenue Commissioners and copies of the report have been provided to the relevant Ministers.

In relation to my own Department, Mercer has suggested that the scheme should be operated through the PRSI system. Obviously, such a development could have serious implications for the Department and these are at present being assessed. Apart from the issue of resources, a key question in relation to the recommendation is the extent to which the Department can, or should, involve itself in what is a private pension scheme.

In addition, following a meeting I had with trade unions representing construction workers, I wrote to the Minister for Finance requesting that the companies awarded public sector contracts should be fully compliant as regards the requirements under the Construction Federation operatives pensions scheme.