Liz McManus (Wicklow, Labour)
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Question 165: To ask the Minister for Social and Family Affairs the steps he intends to take arising from criticism by the Pensions Ombudsman of what he called the theft by employers of pension contributions deducted from employees but not remitted to pension schemes, particularly in the construction sector; and if he will make a statement on the matter. [31735/06]

Bernard Allen (Cork North Central, Fine Gael)
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Question 200: To ask the Minister for Social and Family Affairs the efforts his Department is making to solve the problems regarding construction industry pensions; when he expects the new construction workers' scheme to come into effect; and if he will make a statement on the matter. [31821/06]

Séamus Brennan (Dublin South, Fianna Fail)
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I propose to take Questions Nos. 165 and 200 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.

In this regard, employers who deduct pension contributions from employees and who fail to remit these contributions to the scheme trustees are in breach of Section 58A of the Pensions Act. The Pensions Board will fully investigate all such cases which are brought to its attention.

The main difficulties with the scheme relate to failure to register employees and/or to deduct any contributions to the scheme. 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, in 2005, facilitated a report on the scheme in conjunction with the Department of Enterprise, Trade and Employment. This report, which is referred to by the Pensions Ombudsman, was undertaken by Mercer Human Resource Consulting. 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.

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 the Scope section of my Department and the Pensions Ombudsman refers to the role of the Scope section in that regard.

Dealing with the issues of non-compliance with the Registered Employment Agreement is, in my opinion, the way forward. As the House will be aware, employment rights and compliance featured strongly in the recent partnership talks and I was pleased to see a commitment in "Towards 2016" for the establishment of the Office of the Director for Employment Rights and Compliance under the aegis of the Department of Enterprise, Trade and Employment and a trebling of the Labour Inspectorate. When constituted, the new Office will play an important part in improving enforcement of employment legislation, including registered employment agreements, under one of which the construction industry pension scheme is constituted.

In the meantime, I have asked my Department to consider to what extent it can assist generally, having regard to the powers it has available to visit employers and inspect records. My Department carries out a significant number of employer inspections each year and, in this context, a greater emphasis will be placed on the construction sector.

It is understood that the scheme sponsors and trustees are in the process of closing the CFOPS scheme and replacing it with a new defined contribution scheme to be known as the Construction Workers Pension Scheme. The operative date of the new scheme is a matter for the sponsors and trustees.