Updated 3.15pm with union comments

Some 400 people who were employed at the Foundation for Social Welfare Services are missing close to €10 million in unpaid national insurance contributions, with many fearing for their pensions, UĦM - Voice of the Workers said. 

In a newsletter published on Friday, the union claimed that the former FSWS employees, who were on the agency’s payroll between 2000 and 2007, found that their employer had failed to make national insurance contributions on their behalf, despite the amount still appearing to be deducted from their salaries. 

“According to a preliminary investigation into this blatant breach of the employment law the overall amount involved is close to €10 million. Employees having these contributions missing may end up with a lower pension and might even miss out on the sickness benefit payment,” UĦM claimed.

FSWS confirms problem

In a reaction, FSWS CEO Alfred Grixti confirmed that a problem existed but sought to reassure all employees affected that their pension and social security benefits would not be negatively impacted. 

The matter concerned the period 2000-2007 and workers employed after that date were not affected, Grixti said. 

The issues came to light when FSWS employees nearing retirement started making inquiries into their pensions, only to discover that they did not qualify for the amount that they believed they were entitled to.

The union said it had been told by the Ministry for Social Policy, which is responsible for the foundation, that an internal investigation has been launched and that steps will be taken when the results of that investigation are in hand.

The ministry said that “adjustments were being made” by the Social Security Department for the employees impacted. 

UĦM said it also sought an explanation from former FSWS chief executive Joseph Gerada, who was in charge at the time these discrepancies occurred, asking why he had not flagged the issue, however, no replies were forthcoming. 

Issues relates to 2000-2007 period

Current FSWS head Grixti told UĦM that the foundation was “committed to solve the matter in the shortest time possible while assuring that none of the employees involved will lose any rights with respect to their pension and other social benefits”.

Grixti also told UĦM that the matter was difficult to establish as “no records of finance and payroll are available prior to 2008”, having been outsourced to a private company, and that €9.6 million was a “conservative estimate” of the missing contributions. 

In a circular sent to all FSWS workers, Grixti said that the issue affected 399 workers in total, with problems having been solved for 191 of those employees. 

The remaining 208 employees "are still to have their position rectified," he said, while all FSWS employees have had their NI contributions paid from 2008 onwards. 

Grixti said that he given the UĦM all this information on September 29 and moved to reassure the 208 employees still affected that they were not at any risk. 

"None of their pension and/or social security benefits rights will be negatively impacted in any way," Grixti wrote.