Union will go to court over pensions

Wednesday, February 11, 2015

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

BAHAMAS Communications and Public Managers Union (BCPMU) officials yesterday said the union would take legal action against the Central Bank’s board of directors for “unilaterally” altering the terms of employment, causing the bank’s pension plan to come “under attack.”

BCPMU President Richard Thompson, with support from the Union of Central Bankers (UCB) and other unions, yesterday accused the bank of breaching their collective bargaining agreement by failing to have “meaningful and adequate” consultation with the union with respect to “any changes proposed to the pension plan.”

Mr Thompson said the bank’s “capricious and irrational decision” has affected over 200 employees, and alleged that some employees had lost up to $30,000 annually.

Making his statements at a press conference at Bahamas Public Service Union headquarters on Wulff Road, Mr Thompson announced the union’s decision to take legal action against the bank for its actions, and also called on the government to “accelerate its commitment” in introducing legislation to protect pensions.

“We want justice for our members, and will not sit idly by and allow our members after contributing for 20, 30, 40 years, to retire from the bank, without the benefits to which they are rightly entitled and become a burden on the social services system of the Bahamas,” he said. “The unions are united and prepared to take every action in pursuance of justice.”

He added: “As a union, we call on the government to accelerate its commitment to bring forth legislation for the protection of pensions. We want to put to the citizens of the Bahamas on notice that this is a national issue, and that if the unions allow this capricious and irrational decision by the bank to go unchallenged, then at the point of retirement some appointed board members can simply, by the stroke of a pen, erase the benefits that you have contributed to for 20 to 40 years.”

According to Mr Thompson, Central Bank employees have enjoyed a “defined benefit pension plan,” of which employees contribute five per cent of their salaries.

Mr Thompson said that in the agreements that the unions have with the Central Bank, the bank committed not to take any unilateral action to change the terms of employment. Secondly, Mr Thompson said that under those agreements, the bank promised to consult the unions with respect to “any changes proposed to the pension plan.”

However, Mr Thompson claimed that over the past four years, the Central Bank has attempted to “alter the terms” of the pension fund, first with the integration clause, then a “proposed change from defined benefit to defined contribution,” and finally a “myriad of changes” to the existing defined benefit plan before making final changes in 2013.

Mr Thompson said the union had tried to engage the bank’s governor and the board in consultation, but all of their efforts were “thwarted.” He also said the union has been to the Department of Labour but was not “adequately or meaningfully consulted.”

Nonetheless, Mr Thompson said the bank’s “justification” for the changes was “financial constraints” and the “inability to maintain the status quo” of the original pension arrangement.

However, Mr Thompson said the fact that the board’s decision to implement the changes was never presented to the union for further consideration suggested that it was never the bank’s intention to “dialogue in good faith,” and suggested that the bank had “already made up its mind to implement such changes without regards for the unions or the employees who contributed significantly to the plan.”

As such, Mr Thompson said the union had enlisted the services of attorney Alfred Sears and was seeking legal action against the bank for its actions.

However, Mr Thompson said the union would not make any “hasty” decisions in view of the legal proceedings.

“We have a lot of confidence in the legal process, and we seek to monitor it closely and see where it is going,” he said. “We’re not going to be too hasty to take any action outside of that, but we believe the bank will fully understand their error and seek to correct that. We’re trying to give the bank the benefit of making the corrections.”

Mr Sears said a writ has been filed in court and will be served on the bank shortly.

“We have reviewed the situation, we have given our legal advice that the Central Bank is in breach of the (collective bargaining agreement), and we have been instructed to commence legal proceedings against Central Bank,” he said. “It is a critical expectation that the Bahamians that constitute the employees and the members of these two unions, have been looking for it. They’re entitled to it. It’s the feeling of our clients that this is a national issue, because the pension of our employees is really a fundamental property interest, and there should be a national legislation to secure and protect the pension rights of Bahamian workers.”

Comments

moncurcool says...

The stupidity and lack of education by union leaders in this country continues to be displayed. Firstly, I am tired of these union leaders putting their dirty laundry in the public. If you have an issue with the company, then that is between you and the company, not the public. But the ignorance comes to light with the union leader understanding of a pension. Based on the article, the leader says that the bank has a defined benefit pension plan. The bank wants to change it to defined contribution. With their defined benefit plan, he is crying that the bank can just change the terms. Does this idiot not understand defined benefit. With defined benefit, the employer does all the contributions, and the employee contributes nothing. With that scenario, the employer has the right to change the terms of the pension plan. With a defined contribution, since the employee then contributes, the employer cannot unilaterally change the plan. Gregory Moss was right, that unions today are about headlines, rather than really looking out of the people.

Posted 11 February 2015, 2:07 p.m. Suggest removal

DragonFly says...

There is indeed an idiot here "moncurcool" and that would be you.

Perhaps you should educate yourself or bother to read the article. A "non-contributory" fund is one where employees contribute nothing. Any pension plan, whether defined contribution OR benefit, can be contributory or non-contributory. The Central Bank of The Bahamas has had a Defined Benefit Plan since 1978; and its staff has contributed 5% of their salary monthly since inception. A simple Google search would result in these facts.

Posted 11 February 2015, 4:09 p.m. Suggest removal

Rather that being an intelligent idiot and resorting to name calling, it would be sensible for you to read the article and see what I was responding to in the article. Then you can enter into an intelligent conversation. A defined benefit is not a contribution by employees. It is by the employer. A defined contribution is where employees contribute. The article clearly says they have a defined benefit.

Posted 12 February 2015, 9:31 a.m. Suggest removal

Further, the issue is why does this need to be a press conference for the public. This is a matter between employee and employer. This is the point being made.

Posted 12 February 2015, 9:33 a.m. Suggest removal

That is a question you would have to ask them.

Posted 12 February 2015, 12:35 p.m. Suggest removal

Let us be clear you started the name calling read your comment... "stupid", "uneducated", "ignorant". So yes, you should re-read the article and step outside your ego for a moment to consider maybe you are the one that is wrong as it pertains the article, the union leader and the Central Bank's pension.

Posted 12 February 2015, 12:24 p.m. Suggest removal

CrystalR says...

Who lying?

According to this article http://www.tribune242.com/news/2014/jan… Central Bank says the plan is Defined Benefit but the employees do not contribute anything.

Posted 11 February 2015, 7:16 p.m. Suggest removal

I do not know if I would use the word "lying" CrystalR; but the article you sited is incorrect. The Central Bank's plan is indeed defined benefit and its employees contribute 5% of their salaries to that plan.

Posted 12 February 2015, 12:46 p.m. Suggest removal

The operative word is "defined". What is defined, is it the contribution? Therefore, a fixed rate for the sponsor. Or is it the benefit the employee will receive on retirement? In which case the sponsors contribution rate can go up or down. Therefore, the word contribution in "Defined Contribution" does not speak to whether or not a beneficiary is contributing to their plan.

**Simplified**, as it relates to existing plans in The Bahamas, a pension plan can be:

1. Defined Benefit, NON contributory - where the sponsor makes all the contributions and the beneficiary makes none. e.g. B.E.C
2. Defined Benefit, Contributory - where BOTH sponsor and beneficiary contribute e.g. Central Bank
3. Defined Contribution, NON
contributory - where the sponsor
makes all the contributions and the
beneficiary makes none.
4. Defined Contribution, Contributory -
where BOTH sponsor and beneficiary
contribute e.g. Bahamasair *(I
believe)*

Posted 12 February 2015, 12:34 p.m. Suggest removal

From what i see moncurcool you were the one that started with the name calling and the diplomatic way of spewing insults.However it is understood from the article and the clips from the news the employees were indeed making a contribution as stated by dragonfly.So are u concluding that because the plans are named benefit and contributions that is exactly what is done? because the DEFINED BENEFITplan is the plan that was and still is collecting the employees monthly CONTRIBUTION,to which is matched with the contribution of the employer. So in sayiing that I am now starting to understand the union's concern.Look at it when you are puttin your money into something you should be given the respect to have a say as to how it is used and spent ....so im guessing all the union is saying,the same thing that you are saying, that if the members are making a contribution they should have a right to say how they feel about the changes....be it yea or nay....and anything that is going to produce a loss or a cut in anything in this day and time is a problem, and about airing dirty laundry....sometimes things need to be brought into light so persons can really understand whats goin on in the country.....today for them tomorrow may be for you.....

Posted 12 February 2015, 12:41 p.m. Suggest removal