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Govt. warns employers on social insurance, pension payments

Some employers are failing to keep their workers' social insurance and pension payments up to date, prompting Government to warn of punitive measures.

The Department of Social Insurance (DOSI) is now urging the public to check their social insurance accounts and pensions contributions are current.

Employers face civil debt proceedings and fines of $1,000 per offence if they are lax in their payments.

A Government spokeswoman said yesterday: "In recent days public concerns have been raised regarding the lack of compliance by some businesses and employers in making regular and timely payments into the Contributory Pension Fund (CPF) or Social Insurance."

DOSI director Karen Daniels added her department takes the public's concerns "very seriously".

"The Contributory Pensions Act 1970 requires every employed or self-employed person who works more than four hours a week to contribute to the fund from school leaving age until the age of 65," said Ms Daniels.

"There is a clear process in which this is done and that is the regular deduction from an employee's wage by the employer.

"However when there are instances where employers do not make the required payments into the Contributory Pension Fund on behalf of their employees, then not only does this put a strain on the process, but it also places the employees who have put their trust in the system at a severe disadvantage."

She said: "We have been made aware of situations where people have found out that their social insurance is not current. In those instances we have enforcement measures in place to address such issues.

"Employers are reminded that a 2006 amendment to the Act in Section 32, currently allows for civil debt proceedings to be undertaken by the director to recover any delinquent contributions from directors and officers of a company both jointly and severally.

"The purpose of the amendment was to allow for tougher sanctions towards those employers who continue to be non-compliant. Punishment on summary conviction is a fine of $1,000 per offence, or for each contribution not paid."

The DOSI has now launched a publicity campaign to provide more support to employees and additional guidance to employers on their statutory obligations.

Ms Daniels said: "The onus is not only on the employer, but the employee as well, to ensure that their contributions are paid on a regular basis.

"We encourage every employee to become proactive in ensuring that their pension contributions are maintained current by their employer."

In August, a Supreme Court hearing was told the Hamiltonian Hotel and Island Club Ltd. owed $1.4 million in taxes to Government.

A report by former Auditor General Larry Dennis in 2003-4 revealed the company was $918,667 in arrears in pension contributions.

Former Bermuda Industrial Union President Derrick Burgess also claimed the property had not made any social insurance contributions in 20 years.

In 2006, the Debt Enforcement Unit of the Attorney General's Chambers sued the company over its failure to pay seven different Government taxes.

This year, concerns about lack of health insurance and pensions were also raised when three Hustle Truck workers claimed they were fired for drawing attention to their lack of cover.

Zina Godwin, Sharon Sterling and Keona Smith worked in the office of Government's Hustle Truck Initiative but said their contract excluded them from Social Insurance, payroll tax, health insurance and pensions cover.

When they raised the issue with their supervisors, the women claimed they were unlawfully dismissed.

Anyone concerned about their pension status or social insurance payments should call 294-9242 or visit the DOSI offices on Parliament Street.

Residents can also check their contributions online, www.socialinsurance.gov.bm.

Those exempt from paying social insurance are: full-time students up to the age of 26 who work in their vacation; people earning less than $3,000 a year; widows/widowers in receipt of a benefit; and non-residents employed for less than 26 weeks in Bermuda.

In such cases, an application for exemption must be made to the director, except for full-time students.