Welfare boss failed to raise alarm on missing national insurance contributions

The former CEO of the social welfare agency claims to be unaware of unpaid employee pension contributions during his tenure and yet rectified his personal situation upon retirement.

Joe Gerada, who today chairs the board of the same agency, told fellow board members on Friday he did not know that others were affected like him because of missing national insurance contributions.

In an email seen by MaltaToday, Gerada offered board members an explanation to revelations made earlier by the UĦM’s online news bulletin, Voice of the Workers about missing NI contributions.

The report revealed how 400 employees of the Foundation for Social Welfare Services had missing NI contributions for the period between 2000 and 2007 to the tune of €10 million.

These employees had NI deducted from their wage but only realised now when they reached retirement age that these were not credited towards their pension.

Gerada, who was CEO in that period, did not reply to questions sent to him by the UĦM portal.

However, in his email to board members Gerada defended his decision not to speak to the media, insisting he was left in the dark and the matter was being tackled by the ministry.

Gerada’s explanation suggests that he only became aware of the situation when he himself reached retirement age and was informed that he had missing NI contributions.

However, it appears he failed to flag the matter to higher authorities despite having been CEO during the period under scrutiny. “I was one of the employees and got a taste of this when I retired and was told that I had some contributions missing but when I presented my papers to the department, they acknowledged the mistake and that they would rectify it. They did and case was closed. I did not know that others were affected except one other person who had similar difficulty but who also had it rectified with the department,” Gerada wrote in his email.

He also offered a possible explanation to the problem by suggesting it could have been an administrative mistake “by a payroll clerk” who used “wrong references when sending the contributions to the department”.

“I believe that NI payments were made regularly otherwise they would show in the accounts in terms of high liquidity. The mistake was not corrected in time as no manager probably had checked the numbers, no external auditor ever pointed it out and not even the Government auditor ever flagged it. Also, the social security department never flagged it either,” Gerada said.

On Friday, the government said the situation will be rectified and in an email to all employees, CEO Alfred Grixti informed them that no one will lose out on their pension.

In a subsequent statement, the senior management team at FSWS under Grixti’s helm distanced itself from the problems between 2000 and 2007.

“During this period, none of the Senior Management Team currently in position were responsible for social security contributions. The Senior Management Team assures all workers who were employed with FSWS at that time, that any missing national contribution payments will be rectified in the shortest possible time,” the statement read.

Management also expressed “full solidarity” with all affected employees and “regrets this ever happened”.

It said the agency has invested heavily in mechanisms to maintain the highest standards of good governance. An investigation into the matter is under way.