By NATARIO McKENZIE
Tribune Business Reporter
The BAHAMAS Electricity Corporation’s (BEC) executive chairman yesterday said it was “unfair” for the cash-strapped utility monopoly to continue paying 100 per cent of all employee pensions and medical benefits, claiming that the medical plan alone had cost it $30 million over the past five years without employees paying “a single dime”.
Leslie Miller, during his contribution to the Employee Pension Fund Protection Bill (2012) debate, said that the BEC employee pension fund was now valued in excess of $160 million.
“All of that was contributed by the people of the Bahamas, and not any employee of BEC,” he said.
“ If you want to be fair, it should be mandatory in this Act that whatever an employer contributes to the mandatory pension fund, the employee should make that same contribution.
“I personally don’t believe it’s fair that the people of the Bahamas should carry that burden; it’s their hard earned money that goes into BEC to the tune of $160 million. It is all paid by the people of the Bahamas because the Corporation belongs to them, and the employees pay zero.
“When you ask them to pay 25 per cent they want to go on strike; 25 per cent of their money that they will receive when they retire at the age of 60,” said Mr Miller.
Stephano Greene, head of the Bahamas Electrical Workers Union (BEWU), the union that represents BEC line staff, told Tribune Business that the union was not opposed to a contributory pension plan, but was not interested in something that would yield less benefits.
Mr Greene said: “The pension in BEC is a non-contributory pension, so the staff doesn’t’ contribute to the pension plan. However, we used to have a contributory pension plan, and the Corporation made a decision over 20 years ago that they wanted to move away from a contributory pension to a non-contributory pension.
“I could only assume that was so the Government and the Corporation could decide how they used the money themselves without having to involve the unions. One of the initiatives by the current chairman and Board is to try to have the staff at BEC contribute to the pension, but that has to be negotiated.
“My union cannot agree to it alone, middle management cannot agree to it alone. It has to be an agreement between our union, middle management as well as executive management, ratified by the Board and the Government. Right now it is not in place, we still have a non-contributory pension plan. I believe that is how it’s going to continue to be. We are not interested in any contributory pension plan that will yield less benefits than we currently enjoy.”
Mr Greene added: “What is not being said by the chairman, and whoever else speaking on this matter, is that BEC’s pension plan used to be so well funded that at one point BEC never contributed to the pension plan because it had so much money in it.
“Some Board in the past made a decision to stop contributing, another Board made a decision to diversify the pension fund, and they decided to invest in a number of businesses and the majority of them lost money.
“BEC went from a point where the fund was so over-funded to the point where the fund is struggling, no fault of senior managers, junior or senior staff. It’s difficult for us to accept the chairman going out there and not giving the full facts behind what’s going on in BEC and what happened with the pension.”
Mr Miller, who said there were 8,000 people in New Providence currently without electricity, added that in 2012, BEC spent $1.5 million in sick leave and absenteeism.
“We spent almost $6 million in medical costs for the medical plan. Again, this medical plan has cost BEC some $30 million over the last five years without the employees paying one single dime,” Mr Miller said.
“You ask them to contribute 25 per cent towards the plan, they’ll turn your lights off, that’s the first thing they would say, blackmail and collusion.
“It costs BEC, the people, the Bahamas every year in excess of $12 million to put into the pension plan. Last year they got $3.1 million in bonuses and allowances. We have an accrued liability for vacation time in the amount of $5.1 million, and some of them have almost a year.”