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WARNING OVER ILLEGAL PENSIONS

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Councils are breaking the law on pensions out of ignorance, the Occupational Pensions Regulatory Authority has warn...
Councils are breaking the law on pensions out of ignorance, the Occupational Pensions Regulatory Authority has warned.

A law introduced in 1997 following the Robert Maxwell pensions fund scandal says all deductions from employees, wages have to go into their pension funds by the 19th day of the next month. Councils that fail to do this could face a civil prosecution and fines of up to£100 for each month payments are late.

Authority chair John Hayes said some councils did not seem to know about the law and were regularly breaking it. He added: 'There are signs in the private

sector, at last, that people are getting the message. It wouldn't be good if public authorities were slow to pick it up.'

London Pensions Fund Authority chief executive Peter Scales said: 'I know about the requirement and we have introduced much tighter monitoring procedures in collecting contributions to make sure we don't fall foul of that. If there's a lack of knowledge then I suspect it's because there's a lack of clear guidance being given to people.

'It's a tight timescale. It's not like a company pension where the money goes from one pocket to another. It's about transferring it from schools and all sorts of people to a central administering authority and that takes time. But I don't know anybody who's not doing it or I'd be reporting them for breaking the law.'

Terry Edwards, consultant to the Local Government Pensions Committee, said he was aware some councils had been reported to the regulator for late payment. But he said: 'Councils do know about it, I'm quite certain of that.'

He added that the Local Government Pension Scheme is drawing up a guide to 'reiterate' the requirements to councils.

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