The Broadcasting Corporation of The Bahamas’ (BCB) Pension Fund is challenged and behind it all, is its 2010 mass downsizing exercise.
Wrapping up debate on the Employees Pension Fund Protection Bill in the House of Assembly yesterday, State Minister for Finance Michael Halkitis said the corporation does not have the means to continue funding its own payroll, as well as pension payments, which it has been partially doing for the past two months.
This, he said, begs an urgent need for intervention.
“There is currently little investment income as the corporation sold off the majority of its investment assets to pay benefits to leaving employees,” he said.
“Over the past several months, the corporation has had to sell off a number of securities at various times to maintain the liquid position thus enabling the plant to meet its monthly obligations.”
Back in October 2010, the BCB underwent a major restructuring exercise, during which more than 80 employees were terminated.
Several weeks later, the BCB’s Pension Trust Fund paid out over $3.03 million to that group.
Added to this, were the payments made to a number of BCB employees, who had retired or had resigned prior to the downsizing exercise.
According to Minister Halkitis, this totaled $315,315 for the period October 2010 to December 2011.
“Immediately following the downsizing exercise, monthly payments from the pension trust increased from around $43,000 a month to approximately $79,000 a month,” he said.
“This increase was attributed to an increase in the number of pensioners from 44 in September 2010 to 68 in November 2011. Correspondingly, contributions from employees and the corporation declined from around $65,000 in September to a current level of around $41,000 per month
Minister Halkitis added that on a monthly basis, the corporation is now paying out approximately $38,000 more than the pension plan was taking in and this is having the impact of the rapidly diminishing cash position of the fund.
The minister used the BCB’s Pension Fund to illustrate why the proposed legislation is not only long overdue but beneficial to regulating the country’s financial system.