fail to pay their employees' pension contributions should face criminal prosecution.

Mr. Dennis has advocated aggressive collection from employers who fail to make the required payments to the Contributory Pension Fund. But he advised that delinquent employers face penalties, and in extreme cases should be prosecuted under the Criminal Code.

Mr. Dennis said that he would review progress in implementing this recommendation in his annual report for the fiscal year to March 1998.

He has previously pointed out that provisions of the Contributory Pensions Act 1970 should be rigorously enforced. In a review of the status of outstanding recommendations from his reports of previous years and 1993 in particular, he suggested: "Failure to submit employee deductions should result in penalties being levied and in extreme cases be viewed as criminal acts, and appropriate remedies sought under the Criminal Code.

"Documentation of collection activity should be on file. The account statement should age the outstanding balance and note the penalties under the law for not paying the amount due within the stipulated period. "The input of the Debt Collection Office should be reviewed to determine whether its role as required by financial instructions (all accounts over three months old are to be referred to it) is an appropriate or effective process to collect debts accruing to the Contributory Pension Fund under the Act.'' In reprinting recommendations in reports prepared for the 1993 fiscal year, Mr. Dennis said that appropriate and effective action should be taken against employers who unlawfully retain employees' contributions. He said, "Contributions deducted from employees should be payable into the Fund immediately; they should never be the subject of instalment plan arrangements.'' The Government response to that recommendation was that it would be considered. But the response, issued by the Ministry of Finance, noted: "In respect to effective collection action against employers, the Ministry notes that present practice has resulted in a backlog at the prosecutorial stage.

"Further discussions will be held with the Attorney-General's Chambers to ensure that appropriate legal action is taken against delinquent employers on a more timely basis.'' A clear example of some of the problems the Fund has faced in recent years can be gleaned from this overview. The Auditor recommended in his 1992 report: "The Ministry of Finance should provide sufficient resources to address the on-going accounting and control problems of the Contributory Pension Fund.

The following areas need attention: An adequate, documented system should be employed to ensure that all employers that should be registered are registered; Amounts due from all registered employers should be verified and appropriate adjustments made where necessary; The balances of legally earned contribution units for all beneficiaries (approximately 90,000 records) should be verified and appropriate adjustments made where necessary; Because of the impact on beneficiaries of employers not making contribution payments, the full extent of the law should be brought to bear on delinquent accounts and this action should be timely and without exception.

A Ministry response indicated that a new computerised accounting system was developed and implemented in July 1994. Each employer's account is said to be reconciled before it is transferred to a new accounting system. The response also anticipated steps were to be taken to ensure individual employee records are verified.