More than 500 employers and self-employed persons are not complying with the Pensions Act, Bermuda's top pensions regulator said yesterday.

And many of the 530 "delinquents" are making deductions from their employees' pay but are then failing to deposit them in the company's pension funds, said Pension Commissioner Peter Sousa.

Speaking at Hamilton Rotary, Mr. Sousa said employers who were using the funds for "their own working capital purposes" were committing an offence under the Pensions Act and were probably conducting fraudulent activities under the Criminal Code.

Mr. Sousa said it was difficult to say just how much money was being abused in this way, but he said his department was cracking down on employers.

He said it was the duty of a pension fund administrator to report any delinquent employers to the Pensions Commission.

"When the Commission becomes aware of an employer's non-contribution, it may arrange for a meeting with representatives of the employer to determine whether the employer is able to repay the outstanding contributions and, if so, in a suitable time-frame," he said.

"The Commission's staff may extend the period for compliance provided they are satisfied that in doing so, it is in the best interests of the pension plan members and will ultimately enable the employer to satisfy their respective obligations.

"If at any time the staff of the Commission determine that that the employer is unwilling or unable to take the required corrective action, staff will consider which options to follow under the Act including whether to wind up the pension plan, and/or take steps to ensure that the offending employer and any of its appropriate officers or directors or agents be prosecuted accordingly by the Director of Public Prosecutions.

"I am pleased to report that so far every such employer that has met with the Commission has made satisfactory arrangements to not only commence making current contributions, but also reduce the outstanding balance over a reasonable time period."

Mr. Sousa also said the Commission was also identifying "increasing numbers of

employers that have not attempted to establish a pension plan as required under the Act".

"While on occasion this may occur with the knowledge and agreement of employees, the vast majority of these cases represent an outright disregard for the law and economic welfare of employees," he said.

A similar approach to delinquent employers was taken with companies that had failed to set up a pension fund, he said, adding that provided they then formed the pension fund, they would not be prosecuted.