Larry’s Laws of Larceny- Law 8: The Dishonest Employer Often Starts With the Pension ContributionBondBeebe
Larry Beebe, CPA
An employer to a collectively bargained employee benefit plan has a cash shortfall. He can’t stop paying his employees and he can’t delay the health and welfare contributions. What he can do is delay paying the pension contributions because his employees are unlikely to complain in the short or intermediate term.
I performed a payroll audit on an employer who was delinquent for months in pension contributions. The accountant for the employer admitted that he was delinquent to everybody-the funds, vendors, the federal government and state governments. He said “we have the money, but don’t have time to do everything. I respond to who is demanding attention.” From that time on we scheduled that employer for audit every year, and always collected significant sums as a result.
The pension fund should have a collection policy and a strong delinquency program to avoid employers becoming months late in paying what they owe.