Revaluation of GuySuCo Pension Fund needed to determine status – CEO
…fund has been destabilised – source
…Hand-in-Hand Insurance tightlipped
There have been major concerns expressed regarding the status of the Guyana Sugar Corporation’s (GuySuCo’s) Pension Fund, which is said to be at crisis level, but GuySuCo’s Acting Chief Executive Officer, Paul Bhim, has defended the sugar company’s stewardship of the fund by stating that certain untruths about the fund are being circulated.
Bhim told Guyana Times on Monday there are currently two pension funds for sugar workers. One is for all unionized employees, and it is fully funded by GuySuCo, and there is another for senior staff. In the case of the General Employees’ Fund, the Hand-in-Hand Trust Corporation is the trustee.
Asked about the status of that fund, Bhim said, “It is there…still operational.” Probed further to find out whether the fund is in fact in deep trouble, Bhim said that prior to the recent retrenchments, the fund was properly managed and everything was intact.
“There was no problem. The fund had a surplus, and the last evaluation was done in 2016,” Bhim told this newspaper.
But asked further to provide a financial figure for the fund, Bhim declined to comment. “I can’t give you all the details. Before the evaluation, there was no problem with the pension fund,” he declared.
He, instead, told this newspaper that there is usually a three-year valuation exercise done, and the next one was due in June 2019, but had to be brought forward to this year due to the massive changes.
Bhim stated that the valuation would be conducted following the completion of the entire retrenchment process. “…because we need to know exactly how many employees will remain in that scheme. Don’t forget that the retrenchment; once all is done, we will do an evaluation and determine where we are,” Bhim said.
Despite the vague comments provided by the GuySuCo senior executive, several employees – past and present – have expressed concern about the status of their full pension benefits.
A source close to the company’s financial management told this publication on Monday that the company has been examining the fund ever since the retrenchment process started. According to the source, with the dismissal of workers, the fund has been destabilized. However, Hand-in-Hand Insurance Company has been tightlipped on the matter when contacted by this publication.
Reports are that the Employees Retirement Benefits are in negative territory by $1.1 billion as opposed to $2.4 billion in 2014, according to the 2015 financial statements produced by GuySuCo.
A GuySuCo source had told Guyana Times that the fund has seen a constant decline over the past few years, and the closure of the estates will add enormous pressure on it.
“It was under severe pressure before, and now that GuySuCo is now retrenching, several employees who would have been eligible for the pension may suffer,” the source opined.
It was also noted that the scheme, which is open to salaried employees of GuySuCo who would have been contributing to the pension scheme, may have been severed.
“That will be an onerous pressure to the scheme, because you have new people who are coming in to receive a pension,” the source added, noting that this was a major worry for many fired employees.
Meanwhile, a former employee of the Corporation had told this newspaper also that Demerara Distillers Limited (DDL) pulling out from the fund has added pressure to the fund.
The employee, who asked not to be named as well, is of the firm view that Government had to be aware of the dilemma.
He said this on the basis that there was no likelihood that foreign investors would have joined the fund, as the Financial Act currently prohibits certain levels of offshore investment.
According to the former employee, there is likelihood that the scheme will lose its viability to provide a pension for those who are already receiving a pension, because of the lack of investment portfolios.
“The pension is already burdened by those already receiving a pension, and it will be exacerbated by the additional people who will now become eligible for pension as a result of being severed from the company,” he added.
While the pension fund had been in trouble before the new Government took office in 2015, there was no move made to stabilise the fund, especially in light of plans to downsize the industry.
Asked to comment on the status of the fund on Wednesday, President David Granger said he was unaware of the issues relating to the fund, and has not been apprised of information about it.