Breeda Moynihan-Cronin (Kerry South, Labour)
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Question 12: To ask the Minister for Social and Family Affairs if his attention has been drawn to the recent call from the Irish Congress of Trade Unions for a clampdown on pension abuses in the construction industry; the action he intends to take arising from this call; and if he will make a statement on the matter. [17379/06]

Liz McManus (Wicklow, Labour)
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Question 34: To ask the Minister for Social and Family Affairs the action his Department has taken arising from the recent report by Mercer Human Resources Consulting which made a number of recommendations as to actions his Department could take to ensure full compliance with the construction industry pension fund; and if he will make a statement on the matter. [17378/06]

Séamus Brennan (Dublin South, Fianna Fail)
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I propose to take Questions Nos. 12 and 34 together.

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 is 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.

Given the ongoing controversy in relation to the scheme and compliance with its terms, the Pensions Board facilitated a report on the scheme in conjunction with the Department of Enterprise, Trade and Employment. The report was undertaken by Mercer Human Resource Consulting 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. The consultants are of the view that many of these workers are not genuinely self-employed.

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

In relation to my own Department, the report has recommended that consideration be given to using the PRSI system as a means of enforcing the scheme and collecting contributions. This gives rise to a number of major issues, not least of which is the extent to which the Department should be directly involved in the administration of, what is, a private pension scheme. Major legislative change would be required and the accounting and operational arrangements of the PRSI system would need to be adapted to meet the very different needs and requirements of a funded pension system. In the circumstances, my Department does not consider the use of the PRSI system is appropriate or practical.

Putting the Construction Industry Monitoring Agency on a statutory footing and dealing with issues in relation to self-employment in the industry, as also proposed in the Mercer report, are in my view the ways forward. The former is a matter for my colleague the Minister for Enterprise, Trade and Employment and I have contacted him to seek his views on the prospects for progress in this area.

In the meantime, I have asked my Department to see to what extent it can assist generally, having regard to the powers it has available to visit and inspect employers' records. My Department is planning to carry out 7,000 employer inspections in the current year, and in this context, a greater emphasis will be placed on the construction sector.

With regard to self-employment, designations are, in the first instance, generally made by the Revenue Commissioners. However, it is open at any time to an individual to ask for a determination on his or her employment status for social insurance purposes from my Department. The Mercer report suggested that Revenue need to review their guidelines in relation to self-employment and my Department will assist here as appropriate.

Finally, following a meeting I had with trade unions representing construction workers, I was in touch with my colleague, the Minister for Finance, in relation to ensuring that contractors being awarded public sector contracts are complying with their obligations under the Construction Federation Operatives Pensions Scheme. The Department of Finance is, I understand, planning to introduce new standard contracts for public sector building projects later this year. The draft contracts, which are subject to consultation with the industry, include provisions that require contractors to ensure that pay and conditions of employment comply with the law and are not less favourable than the terms of the Registered Employment Agreements for those employees to whom the agreements apply. I think this provides a good opportunity to strengthen enforcement in relation to the pension scheme in question.