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APLI 15 December 2011

APLI 15 December 2011. Murphy’s Law Reaffirmed (He hasn’t gone away, you know….). A Few Statistics. 2003: 155 complaints received 2004: 297 2005: 389 2006: 439 2007: 515 2008: 758 2009: 636 2010: 589. And more…. Year to end November, 508

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APLI 15 December 2011

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  1. APLI15 December 2011 Murphy’s Law Reaffirmed (He hasn’t gone away, you know….)

  2. A Few Statistics • 2003: 155 complaints received • 2004: 297 • 2005: 389 • 2006: 439 • 2007: 515 • 2008: 758 • 2009: 636 • 2010: 589

  3. And more… • Year to end November, 508 • Annual average 515 plus 950 phone/e-mail cases where issues raised and resolved

  4. And even more… • Cases closed: 723 phone/email, plus 555 investigations. • Report and Guidance given: 203 • Mediated: 146, 103 favoured complainant • OTOR: 76 • Final determination: 74, 27 allowed • Other: 56 • Public/private sectors: 30% / 70% • Cases on hand 30 November 2011: 430

  5. Frequent Complaints • Integration and the way it is applied • When pay increase doesn’t exceed State Pension increases FPS goes down, but historic contributions were on higher rates • Contributions based on basic, benefits on pensionable • Final Pay • e.g., three-year average for computing benefits but contributions based on annual pay not averaged • Contributing for more than 40 years

  6. Problems • Failure to wind up promptly • AVCs not administered with main scheme benefits • Public service AVCS – pensionable -v- actual service • NRD for lump sum calculation • Early Retirement – ill health and normal • Deferred beneficiaries given options previously • Last-minute AVCs now locked in • Retirement at 60 promised - promise not honoured • Evidence proved intention – settlement reached

  7. Public Sector Problems • Pension Levy (or pay cut) • Reductions in pensions in payment • Miscalculation • Silly deadlines • Example: HSE VER and VSS • 17,000 estimates prepared • 4,000 detailed calculations • Final exits: 2,005 • Meantime, “routine” work sidelined, ordinary retirement payments delayed

  8. …. And More • Spouses’ and Children’s contribution liability not notified • Misclassification of employees as post-1995 “new entrants” for PRSI • Liability for extra superannuation contributions • No hope of recovering most of the overpaid PRSI • Interdepartmental negotiations around 800 teachers • Spouses and Children’s schemes – opters-out and would-be opters in • Change of job or status

  9. Injury Grants • Attempt by HSE to discontinue automatically at age 65 • Circular sent by Employer umbrella body • Statute says “shall be paid for life, or for such shorter period….” • No power to fetter discretion in advance

  10. Private Sector Problems • Pension Levy • Section 50 applications • Consultation a problem? – No regulations made • Winding-up delays • Unremitted contributions, as usual • Refusal of Early Retirement • Investment issues • Failure to carry out instructions – or not…..!

  11. And more… • No trustee to wind up the scheme.. A common problem • The lady who lived too long • D.I.S Benefit not protected – delay in payment – loss of €43k • Declared Trustee investment policy not followed – loss of AVC value • Employers who are own trustees don’t always understand obligations or Pensions Act duties

  12. CWPS Problems • Industry in ruins • Vast amounts outstanding* • Death Benefits not payable • Criminal prosecutions successful but don’t recover money in most cases • Schemes of arrangement – post dated cheques (many bounce) • Ers not even liquidated… *11 determinations yesterday totalling €93k +

  13. The Rise of the Phoenix • Endemic in Construction • New firms, often same Directors, same employees, take up old contracts • Old firm owes Revenue, Redundancy, CWPS etc • N.I. Registered Company • Operated through RoI Branch • Ceased to trade. I could not touch NI Company • New Phoenix operation going Registered in RoI • 3 Complainants to make complaints to an Garda in bid to obtain conviction and disqualification

  14. OPO and the Law • Few appeals under S. 140 • Most – and most troublesome – brought by the State • Afraid of precedents • OPO now has enforcement of determinations power formerly with Minister • One JR: “Conduct of Applicant throughout the proceedings characterised by fraud and deceit”

  15. Penalties • 16 District Court prosecutions in 2010 for failure to provide information • Appeals to Circuit Court • Costs €1300 to €2300 • And we often get the information on the morning the Court case is heard • Enforcement of requirement for information – Circuit Court

  16. Other issues • Current issues include payment of benefits under PAOs in Public Sector • They couldn’t make up their minds that there was only one pension • Arrears of overpayment • Application of the USC • Death in retirement is a huge issue – Family Law Acts and drafting

  17. Things We have Learned • Public Service Admin is uneven • Some Departments centralise, some don’t • Loss of expertise • Reluctance of people to stay in Superannuation Section • Promotional criteria a problem here • Specialist Staff means fewer problems • Need for recognition • At last, Shared Services!

  18. Things we have learned, cont’d • Investment – “proper investment” • Disinvestment of AVCs and DC in winding-up • Can the trustee ever be right? • Amalgamation of (DC) AVCs with DB fund • A considered decision, or just laziness? • “Having regard to the nature and duration of the liabilities” is just a new way of saying something very old • “Cooling-off” period and ARF • Employment Agencies and PRSA Obligations

  19. It’s not all serious…. • Not pensioned on all of his service – shortfall in benefits • Misinformation on transferred service – overstated by 100 days - “loss” was €3.38 per fortnight • PO cannot compensate for loss of expectation • Civil servant missing pension credit for ONE day of his service • It was a strike day • One man complained that trustees hadn’t told him inflation would erode the value of his pension

  20. It Really Isn’t • Lady complained she had lost 2½% of her pension • She insisted it be paid by cheque • She liked to go to the Post Office • She doesn’t trust ATMs • Everyone else paid by EFT and got an increase of 2½%....... • She didn’t understand basic arithmetic • She had been a National Teacher • Another Complainant insisted on being paid by cheque, then complained that compensation for EFT not included in pensionable pay – he understood, but claimed anyway

  21. They haven't gone away…. • Complainant wanted average of allowance going back 10 years to be pensioned • Changed duties – allowances red circled until new scale caught up • Rules didn’t pension best 3 in last 10 • Complainant submitted Labour Court case in support • Failed to submit his own Labour Court case by which he had agreed to be bound • Told him frivolous and vexatious –don’t write again • Asked Scheme Administrator to write on his behalf!

  22. Questions?

  23. Office of the Pensions Ombudsman36 Upper Mount St, Dublin 2 • 01 647 1650 • 01 676 9577 • www.pensionsombudsman.ie • info@pensionsombudsman.ie

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