The District Court has for the first time imposed a custodial sentence on company directors for failing to remit employee pension contributions to the trustees of a pension scheme.

Employers who deduct pension contributions from their employees’ salaries or wages are required to pay them into the scheme within 21 days of the end of the month.  Goff Developments Ltd made the requisite deductions but failed to pass sums amounting to almost €12,000 to the trustees of the Construction Workers Pension Scheme.  The Court found that the offence committed by the company was committed with the consent or connivance of, or was attributable to the neglect of, its directors.  The directors of the company were each sentenced to five months imprisonment and fined €4,000.  The company was also convicted and fined €4,000.  Legal costs were awarded against the company.

The Pensions Board, which monitors employers’ compliance with pensions legislation, is understood to have instituted up to 40 prosecutions in similar cases and is expected to initiate proceedings in a number of additional cases before the end of the year.   

Employers and company directors should be aware that the Pensions Board is treating the failure to remit employees’ retirement contributions to pension scheme trustees as a serious offence and the Board has not been slow to use its prosecution powers.  Any persons with concerns as to the late remittance of pension contributions or concerns as to other contraventions of the Pensions Act should consider contacting their legal advisers as soon as possible in order to regularise their position

Contributed by Michael Wolfe.