The Tribune

By LAMECH JOHNSON

Tribune Staff Reporter

ljohnson@tribunemedia.net

CENTRAL Bank of the Bahamas union members have challenged their employer to produce documented proof that the employee pension plan is unsustainable.

As work-to-rule continues after a letter was issued about changes to the existing plan, members and the president of the Union of Central Bankers protested yesterday outside Trinity Methodist Church where Parliamentarians gathered for a church service marking the opening of the House of Assembly for 2014.

Melony Munnings, UCB president, told The Tribune that “a letter was submitted on the 23rd (January), an approved letter, regarding changes that were made to the pension plan, unilateral changes.”

“We want the bank to withdraw that letter in order for us to come to the table and negotiate the terms of that pension plan properly as it should be done.”

Responding to claims by Central Bank executives that the current plan was unsustainable, she said: “We want the bank to prove that.”

“That’s all we ask. We ask them to produce the right documentation and the right proof to the union, to satisfy the union that it is unsustainable.”

Central Bank had previously issued a statement indicating that it was facing an “unsustainable” employee pension contribution rate of 20 per cent, following strong union objections over recent adjustments made to it.

It said that while it was aware of the union’s objections, it denied that the decision was a unilateral one, taken without proper consultation.

It added that the existing defined benefit plan, where the Central Bank contributed 100 per cent of the monies with no staff contribution, was simply too burdensome. Contribution rates were as high as 20 per cent of an employee’s annual salary.

“Following a fundamental change in the plan design (the removal of the integration clause with the National Insurance benefits), mandated by the staff, among other cost factors, the bank is now faced with a double-digit contribution rate of over 20 per cent, which is clearly not sustainable or reasonable,” the Central Bank said.

“Like any responsible employer, the bank, at the very outset of the design change, made staff and the unions aware that measures needed to be pursued to bring these costs back into an acceptable range.”

It added: “Consistent with the bank’s approach to these matters, a consultative process was launched in May 2011, with full engagement of all parties, and transparency. Various options for achieving the cost reductions were developed by the bank, and presented for the consideration of the unions and staff, and the bank believes that the decision taken allows for the least change outcome in employees’ original expectations.

“As a responsible institution, the bank takes its obligations to employees seriously, and would never make arbitrary or capricious decisions. The bank acknowledges that this subject matter is highly sensitive, which correlates with the extensive consultation period permitted, of nearly three years.”

Yesterday Munnings confirmed the issue arose in 2011 where the bank proposed to remove the integration clause from the pension plan. After a series of back and forth discussions, Central Bank allowed the integration clause to remain.

She said the issue resurfaced in early 2013 stretching into the end of last year when a letter was issued to the membership detailing new terms and conditions of a pension plan that did not have the union’s input. 

Munnings said the work-to-rule will continue until their demands are met.

The UCB president and members were backed by other members of the Bahamas’ National Congress of Trade Unions in the protest.

John Pinder, president of the Bahamas Public Service Union, said the current dilemma concerning the pension plan “is a very, very important issue.”

“As a matter of fact, I believe it is a national issue because if a government agency could threaten a pension plan that is more than 30 years old, then what do you expect for the private sector to do.”

“If they start here, they will duplicate that in the other government agencies. So we are here to show full support that the pension remain as is and the government must find ways to maintain it,” he said.