Govt will analyze how to deal with $39 mil. BTC pension obligation
While the government is determined to pay $3 million in the 2019/2020 budget toward the $39 million owed for obligations to BTC after its 2011 sale to Cable & Wireless Communications (CWC), Acting Financial Secretary Marlon Johnson said yesterday that an actuarial analysis has to be conducted to determine how the remaining costs will be paid moving forward.
In April 2011, the Ingraham administration sold a 51 percent stake of BTC for $210 million and committed to underwriting the costs of meeting the legacy defined benefits pension plan for BTC employees.
However, the money was never budgeted.
“Part of the agreement with Cable and Wireless and the government was to fill what would have then been defined as a $39 million deficit in the pension, and so that was part of the shareholders agreement for the government to cover that cost,” Johnson explained, during the annual budget press conference at the Hilton.
“To put it as simply as possible, it was never funded. So that pension liability continues to build and grow.
“…It’s one of those things that as we got information, it became known to us during this fiscal year.
“So, we have been in discussions with the government representatives of the board to BTC to figure out how that matter would be addressed.
“An allocation of $3 million was put in the budget to start to pay down on it, but the bill is still there, and so we will use this year to really do the proper actuarial analysis…to determine how that obligation needs to be filled going forward.
“So that’s yet again, over and above the $360 million, that wasn’t included in that.
“That’s another $40 million or so in unfunded liability that needs to be addressed.”
As he presented the 2019/2020 budget communication on Wednesday, Deputy Prime Minister and Minister of Finance Peter Turnquest advised that the government will pay an additional $100.4 million toward the $360 million build up of bills it met when the Minnis administration came to office.
Asked yesterday whether the government continues to find outstanding bills leftover from previous administrations, Turnquest said, “We are unfortunately still paying bills. In last year’s budget we had indicated there’s roughly $360 million of arrears that we were intending to address over the next three years.
“We have budgeted $172 million for this current fiscal year and we’ve addressed $129 million of that to date and we will see where we get to by the end of the year.
“And in the upcoming year, we’ve budgeted another $100 million to address another $100 million of that and then next year we will address the balance.
“The idea is that over the next three-year period, we will liquidate all those arrears and that means that money is now freed up for us to give back to the Bahamian people in the way of further duty reductions, in the way of new programs to stimulate economic activity on the one hand, build infrastructure and to provide the social support that we need.”
Education: Vrije Universiteit Brussel (University of Brussels), MA in Mass Communications