ElAmin reports.

The Auditor General has again criticised Government for poor financial reporting on the state of the Contributory Pension Fund.

In past years the Auditor has slammed Government for being far behind in the financial reports of the fund, and for sloppy accounting practices. Last week Finance Minister Eugene Cox submitted reports for the two years up to July 31, 1994 when the fund held $269 million.

According to previous Royal Gazette reports, the fund has grown to hold about $533 million. Workers in Bermuda and employers contribute to the fund for old age pension, disability and death benefits.

But again, as in previous years, Auditor Larry Dennis stated he was unable to give an opinion about whether the 1994 and 1993 reports were accurate. He blamed poor accounting practices and internal controls in the handling of the money.

"My examination indicated serious deficiencies in the accounting records and the systems of internal control over contributions receivable and benefits paid,'' he stated. "As a consequence, I was unable to confirm or verify by alternative means, contributions receivable and benefits paid included in the financial statements totalling $16,833,915 and $46,215,720 respectively.'' Mr. Dennis acknowledged Government was in the process reconstructing the contributions receivable and employee contribution records. Government has also been in the process of beefing up computer systems and the accounting in the Contributory Pension Fund.

It is understood the Ministry of Finance is working on preparing reports up to the July 1998 for submission over the next year.

Mr. Dennis noted he was unable to determine what adjustments were necessary to the fund as the accounting was brought into line with acceptable practices.

"Accordingly, I was not able to determine whether any adjustments might be necessary to contributions receivable, contributions revenue, benefits paid, increase in net assets and net assets available for benefits,'' he concluded.

He also stated he had also made a "denial of opinion'' of the financial reports of 1992, and 1993. The Auditor General has also made similar statements about previous reports.

At July 31, 1994 the pension fund had $269.03 million in net assets available for benefits, up $21.2 million or 8.6 percent in a year. Employees and employers, including Government, put in $63 million during the year, up $7.06 million, or 12.6 percent over the previous year. The fund paid up $46.22 million in benefits during the 1994 year, up $4.15 or 9.9 percent. As at July 31, 1994 the fund had net assets available for benefits were more than five times the benefit payments. In the last two years Government has warned the fund's payment benefits are not enough for pensioners.

Govt. criticised Retirees receive $769 a month in benefits. The ex-UBP Government put in place the National Pensions Scheme (Occupational Pensions) Act 1998, which makes it mandatory for businesses to establish private plans by 2000. About 40 percent of the workforce contributes to a private plan and the Contributory Fund.

Government thinks without any adjustments the fund will run out of money for benefits by 2030.

Larry Dennis