Jagdeo demands answers from Govt on $32B pension liability

…calls for tabling of 2016 GuySuCo financials
Government is yet to address the billions of dollars in liabilities contained in the Guyana Sugar Corporation (GuySuCo) 2016 audited financial accounts or even table the statements in the National Assembly, a fact that has not gone unnoticed.
On Monday, Opposition Leader Bharrat Jagdeo called for the Government to table this statement in the house and give an account for its management of the sugar sector and what is the largest pension plan in the country.

“Since my press conference, we saw a resurgence of concerns about the GuySuCo pension scheme. We now see GuySuCo 2016 audited financial statements disclosing a huge unfunded pension liability of over G$30 billion. But no one in Government is speaking publicly about this or engaging the Unions and the workers,” the Opposition Leader said.
He added that the “largest pension plan in the country, the largest employer, a major unfunded pension liability, and no one in Government seems willing to talk about it. GuySuCo audited accounts for 2016 was completed almost one year ago. However, it has not yet been tabled in Parliament. The PPP [People’s Progressive Party] calls on the APNU-AFC [A Partnership for National Unity/Alliance For Change] Government to table the audited accounts and come clean to the Parliament on the many important issues.”
Jagdeo noted that with the rapid pace at which GuySuCo is being stripped of its assets, tens of thousands of people could end up being hurt. According to the Opposition Leader, the coalition seems oblivious to the need to consult with the people who would be most affected – that is the Corporation’s employees.

Privatisation process
The Opposition Leader also raised several questions pertaining to the privatisation process itself, asking for the Government to provide a deadline for resolving the outstanding employee issues, such as their severance payments.
“When will the employee issues be settled, and negotiations concluded with the Unions?” Jagdeo questioned. “Just look at the pension issue as one of many issues to be resolved. What is the severance pay package? When will all the outstanding NIS, PAYE, and other employee benefits … be paid?”
Jagdeo also questioned how private cane farmers would be paid, “given the existing formula enshrined in legislation”. He noted that the legislation has worked with only one national sugar corporation.
“Cane farmers don’t know how this will change with private ownership of the estates. In fact, the closure of estates, such as Skeldon, is likely creating considerable dislocation in the private cane farmers industry,” Jagdeo stated.

Financial statement
According to 2016 financial statement, GuySuCo had a defined benefit obligation of $44 billion, contrasted with a value of assets of only $11.2 billion. This means that there is a net deficit of $32.8 billion.
The audit opinion shows that GuySuCo does not have the resources to fund its liabilities, including that of the pension. And since the statement does not quantify this ‘surplus’, questions remain over how this deficit will be funded.
Instead of a deficit, GuySuCo had claimed in a recent statement that based on the last actuarial report done on its Guyana Sugar and Trading Enterprises Pension Scheme (GSTEPS), the fund had reflected a surplus.
The Corporation had noted that the GSTEPS fund is funded by pension contributions from both GuySuCo and the returns on any investments made using the contributions. It was noted that employees are paid a defined amount based on their salaries and years of service.
“The contributions are held in trustee administered funds, which are separate from the Corporation’s finances and the pensioners are paid from the trustee administered funds,” the statement had read. “Employees who have retired and are not members of the pension scheme, these include employees below junior staff level, are paid ex-gratia pensions.”
“(This) used to be partially recoverable from the Sugar Industry Price Stabilisation Fund (SIPSF); this is no longer the case and these pensions are fully funded by the Corporation from its own cash resources. These employees are not required to make any contributions to a pension fund as in the case of the employees who are members of the GSTEPS scheme.”
It had also noted that current ex-gratia pensioners at the vested estates in Wales, Enmore, Rose Hall and Skeldon, continue to receive their pension from the Corporation.
In addition, it was pointed out that severed employees who are eligible for ex-gratia pensions will be paid by the Corporation.