ERROR RG P4 16.3.2000 Stephen Thomson, owner of Coral Cleaners New Management, would like to make it clear that although the company was listed in the annual report by the Auditor as owing nearly $89,000 in pension fund contributions, the debt refers to the previous owners of the Hamilton business, Coral Cleaners Ltd. and that his firms are up-to-date.

A $2.1 million list of shame of firms which have failed to stump up pension contributions has been published by independent Auditor Larry Dennis.

Among the companies named is the Government-owned Stonington Beach Hotel, which is listed as owing $64,321 in pension contributions.

And Mr. Dennis -- who published the list in his annual audit of Government finances on Friday -- said Government's failure to crack down on the problem could expose it to "a significant legal liability.'' Mr. Dennis said -- at July last year -- a total of $5 million in employees' contributions was owed to the Government pension scheme.

And he added: "When employers fail to remit their employees' and their own pension contributions to the fund, they betray the trust of their employees and could be cheating them out of their pensions.'' Mr. Dennis threatened to name names in his audit of Government's books last year -- and has listed nearly 30 companies which owed $50,000 or more in unpaid pension contributions up to June last year.

He said: "I cannot stress too strongly my concern about employers who collect pension contributions and payroll taxes from their employees and delay remitting them to the Government.

"These employers, in effect, use their employees' pension contributions and tax deductions to finance their business operations.

"This behaviour is illegal and, in my view, unconscionable.'' And Mr. Dennis warned: "Some of these contributions and the related employer contributions will inevitably not be collected and will be written off.

"As a result, employees who believe they have contributed to the fund will later find that their pensions are less than they paid for.'' Mr. Dennis added that similar problems existed with late payment of payroll taxes -- with some of the same firms late with pension payments also behind with tax remittances.

And he said there were "serious and pervasive deficiencies in the accounting records, internal controls and collection procedures used by the Pension Fund in its dealings with its collection agents'' -- the employers.

Pension arrears Mr. Dennis added: "In my view this degree of mismanagement is tantamount to breach of trust on the part of Government and could possibly create a significant legal liability.'' But he said that "little effort'' was put into chasing down bad debts until 90 days of arrears were logged -- when past-due accounts are forwarded to the Debt Collection Office.

Mr. Dennis added, however: "Despite its name, the Debt Collection Office does not attempt to collect amounts owing from employers, other than by initiating court proceedings.

"However, when this process involves the Attorney General's Chambers, collection efforts often break down.'' Mr. Dennis said the Department of Social Insurance had told him that the lack of legal assistance from the AG's Chambers, together with inadequate enforcement legislation, handicapped collection efforts.

He added: "With financial controls and collection procedures like these, it is hardly surprising that employers who seek to gain financial advantage by delaying their remittances can accumulate significant past-due balances.'' Pension Contribution Remittances in Arrears Who at June 30, 1999 owed more than $50,000 to the Contributory Fund in respect of Pension Contributions more than 90 days in arrears: Hamiltonian Hotel & Island Club $165,424 Marvin Seaman $115,434 Darrell Contracting Services $110,097 Universal Construction $107,537 Nusum Electrical Services $103,544 Four Star Pizza $94,298 Beeline Transport Ltd. $89,179 Coral Cleaners New Management $88,928 The Village Carpentry Ltd. $86,152 Staples Ltd. $78,546 Wharf Tavern $78,055 Bermuda Taxi Radio Cabs Ltd. $75,477 Health Tech Ltd. $75,312 Just Cleaners Ltd. $75,160 Smith & Sargeant Painting $74,105 Town & Country Carpet Ltd. $72,969 Tony DeCosta General Contracting $69,948 Spinning Wheel Ltd. $68,885 MacWilliams Restaurant $67,082 Stonington Beach Hotel Ltd. $64,321 Bermuda Merchandising Company $64,274 Wellington L. (Young) Burrows $60,226 Charles F. Batson Swan $59,816 Pyramid Construction $59,467 Fernando Rego Bob-Cat $57,087 Roosters $56,846 Bermuda Marketing Ltd. $51,383 Total $2,169,552 Auditor Larry Dennis