business@tribunemedia.net
FRIDAY, APRIL 5, 2024
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Public pensions shake-up over $3.5bn liabilities hole GRAND BAHAMA PORT AUTHORITY (GBPA) HQ
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
GBPA ‘vehemently disputes it owes $1’ of $357m Gov’t claim
• Unfunded obligations ‘top risk’ to Gov’t finances PENSIONS for thousands of Bahamian public sector workers are poised for a • Taxpayer burden to rise major shake-up in a bid to 33% to $219m by 2030 tackle “alarming” unfunded liabilities that could impose a $3.5bn burden on taxpayers • Likes of NIB, PHA, BDB come 2030. Simon Wilson, the Minto join contributory plan istry of Finance’s financial secretary, told Tribune Business last night that these pension liabilities represent “the top risk” to the stability of the Government’s finances and need to be “dealt with as soon as possible” to reduce the threat that taxpayers will increasingly be called upon to plug this multi-billion dollar hole. He spoke ahead of today’s consultation closure on the draft Pensions Bill 2023, which will end the present ‘pay-as-you-go’ pension scheme enjoyed by the Government’s near-20,000 existing
civil servants through requiring them - for the first time - to contribute to financing their retirement from their own salaries. The Ministry of Finance, explaining the background to the proposed legal reforms, revealed that financing the current system will increase the annual burden imposed on Bahamian taxpayers by 32.7 percent or $54m over the next six years as growing numbers of civil servants retire and become pensioneligible. The yearly funding
bill is forecast to grow from $165m at present to $219m by 2030. Civil service pensions are currently 100 percent financed by taxpayers through the annual Budget, and the Ministry of Finance said: “During the past two years, the Government’s mission has been to prioritise the containment of growth in relation to pension liabilities, aimed at reducing the burden on public sector finances. Currently, the Government carries an unfunded liability of more than $2bn.
SIMON WILSON “Pension consultant, KPMG Advisory Services, conducted a pension reform feasibility study on the Government’s pension scheme in 2013 which was revised in 2022. This study estimated pension liabilities for public sector employees would accumulate to $2.2bn between 2013 and 2020, and projected an increase to $3.5bn by 2030.”
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‘Mind-boggling’ timing over Gov’ts $357m GBPA claim By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A FREEPORT attorney yesterday asserted it was “mind-boggling” that the Government should again “throw darts” at the Grand Bahama Port Authority (GBPA) given the island’s $2bn investment pipeline.
Kirk Antoni, the Cafferata & Company partner, told Tribune Business that the Government’s demand for the GBPA to pay it $357m within the next 30 days was “such bad timing” given that Freeport and wider Grand Bahama economy finally appear poised for economic revival after two decades in the doldrums.
Predicting that the Government’s demand for reimbursement, which would enable it to cover the costs of providing public services in Freeport over and above the tax revenues generated by the city, will likely be tied up in arbitration for three to five years, he argued that it should instead focus on facilitating investment approvals rather than confrontation.
Mr Antoni said he viewed the $357m payment demand, which represents a significant increase on the $152m previously claimed by the Government, as a squeeze play or pressure tactic designed to force the GBPA’s joint owners, the Hayward and St George families, to sell to it at “a pepper corn” price so that it can then “take
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Security concerns drive FINCO’s $500 ATM limit By FAY SIMMONS Tribune Business Reporter jsimmons@tribunemedia.net ROYAL Bank of Canada’s (RBC) BISX-listed mortgage financier has this week imposed $500 daily automated teller machine (ATM) withdrawal limits in a bid to better protect customers from fraud. The Canadian-owned bank, in a statement responding to Tribune Business inquiries, confirmed that the changes - which also involve the imposition of a maximum four “free” monthly ATM withdrawals per client - will only will impact FINCO (Finance Corporation of The Bahamas) clients.
It said: “At RBC, our priority is safeguarding the security and financial wellbeing of all our clients. In line with keeping this commitment, we implemented an adjustment to the daily ATM limit for our RBC FINCO clients. “It is important to highlight that this adjustment only affects our FINCO clients and does not apply to all our RBC clientele. RBC FINCO is the mortgage subsidiary of RBC. We have proactively made efforts to notify our FINCO clients about these changes.” FINCO customers were informed of the limits in a letter dated April 2, 2024, which explained that
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Albany developer’s Bahamas return after spared jail time By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net ALBANY’S principal investor was given permission to return to The Bahamas as early as yesterday after being spared jail time following his previous guilty plea to securities fraud. Judge Jessica Clarke, in a written order, said Joe Lewis, the Lyford Caybased British billionaire, is “released from his bond and is hereby permitted to travel today or tomorrow to The Bahamas on his plane” after sentencing him to a $5m fine and three years’ probation over
a much-publicised insider trading scheme. Mr Lewis, who spearheaded Albany’s multi-million dollar development in southwestern New Providence via his Tavistock Group, acknowledged responsibility for his conduct as he told the southern New York district court: “I made a terrible mistake. I broke the law. I am ashamed, sorry and hold myself accountable.” The judge said he had committed “without doubt a serious offence” but, because he “faced his charges head on instead of engaging in what could have been a lengthy extradition fight”, she would opt
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• Payment demand doubles due to extra years • Public sector wages included in spending • Move is another step towards arbitration By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Grand Bahama Port Authority (GBPA) “does not accept it owes $1 to the Government out of that $357m” claim which has more than doubled after the number of years included were expanded. Freeport’s quasi-governmental authority yesterday did not respond officially to the Government’s increased payment demand, but well-placed sources speaking on condition of anonymity confirmed that the sum is “vehemently and vigorously disputed” by the GBPA and its owners, the Hayward and St George families. Tribune Business was told that the Government’s claim, which has effectively increased by 135 percent or more than $200m, has expanded in size because it now covers five years of purported expenses as compared to the initial $152m which only related to twothree years. That $152m payment demand was made on June 12, 2023, and is understood to have covered the period between July 1, 2022, and March 31, 2023. Both sums represent expenses
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