TUESDAY, AUGUST 30, 2016
business@tribunemedia.net
Govt given road map to $2bn pension cuts By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Government could reduce its combined civil service and public corporation pension liabilities by more than $2 billion come 2032, provided it enacts reforms to prevent a major financial and social crisis. The Christie administration has been presented with two options, which it has yet to enact, to address the growing multi-million dollar public sector pensions deficit by KPMG. The accounting firm’s presentation to the Government, which has been obtained by Tribune Business, suggests as a first option that it place all new civil
Urged to close existing plans to new hires And introduce ‘pensionable salary cap’ KPMG: Existing schemes outdated and unsustainable service and public corporation hires into newly-created defined contribution pension plans. This would close existing corporation plans, such as
those at BEC and Water & Sewerage, to new recruits, while leaving existing employees - and their accrued benefits (liabilities) untouched. However, KPMG suggests a second, more radical solution that would have a greater impact in terms of reducing the Government’s liabilities in providing retirement income for public sector employees. In addition to placing new recruits into a defined contribution pension plan, KPMG calls for the Government to ‘cap’ the growth of pensionable salaries for existing workers. It suggests that they be ‘capped’ at an annual growth rate of 2 per cent, with existing public sector
employees given the ability to contribute any salary increase portion above 2 per cent into the defined contribution scheme. By combining the ‘pensionable salary cap’ with closing existing pension schemes to new hires, KPMG forecast that the Government could reduce its accrued liabilities (retirement benefits that public sector workers have accumulated) by a total $2.01 billion in the 20 years to 2032. It broke this figure down into a reduction in accrued civil service liabilities of $1.5 billion, while those owed to public corporation retirees would decline by $510 million. See pg b5
$30m ‘game changer’ BOB non-compliant with 80% of regulatory ratios target for Freeport By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A realtor is hoping innovative marketing will enable him to succeed where others have failed in selling Freeport’s $30 million Xanadu Beach Resort, describing a successful deal as “a game changer” for the city. Arlington Capron, principal of Bahama Islands Luxury Properties, told Tribune Business that the resort and associated amenities had been placed back on the market after a potential sale “fell through”. While the Xanadu is listed for sale by numerous Bahamian realtors, Mr Capron yesterday explained that he aimed to ‘stand out from the crowd’ through the creation of a website that is dedicated solely to marketing the resort to potential investors. “Every company has it on their website,” he said. “The approach I wanted to take was to create a website specifically for that property, and give a comprehensive view of the property itself, so that people can focus in on it with no distractions and see the potential.” The Xanadu’s owner, Mario Donato, has been seeking to sell the resort that was once the home of eccentric billionaire industrialist, Howard Hughes, for four to five years. Tribune Business last year reported that a sale had been agreed with Kyle Houts, a US-based entrepreneur, but that sale appears not to have concluded, although it is unclear whether it was the latest
Xanadu ‘back on market’ after sale falls through Realtor sets up dedicated website to market property Re-opening would create jobs for ‘300-plus’ deal to fail. “There was a sale pending, but it fell through about a month-and-a-half ago,” Mr Capron told Tribune Business. “It’s back on the market. Freeport needs some help, so I’ve sent this See pg b4
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By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
Bank of the Bahamas shareholders are being asked to “throw good money after bad”, with the BISX-listed institution now non-compliant with FOUR out of five key Central Bank capital ratios. Dionisio D’Aguilar, another Bank of the Bahamas shareholder, said the $40 million rights issue that launched yesterday was merely the latest phase of a rolling series of government ‘bail outs’ for the institution. He added that current investors were being asked to inject more equity capital despite no apparent, meaningful changes having yet been made to Bank of the Bahamas’ corporate governance structure, while few specifics have been revealed about its turnaround plan. Suggesting that few of the 35 per cent minority investors were likely to See pg b4
Breaches increase from two to four out of five Shareholders asked to ‘throw good money after bad’ D’Aguilar: BOB stock ‘ain’t worth $1’
Dionisio D’Aguilar
CCA’s Baha Mar creditor committee ‘conflict’ slammed By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Opposition’s deputy leader yesterday slammed the ‘conflict of interest’ created by the inclusion of a senior China Construction America (CCA) executive on the committee that will handle Baha Mar creditor payouts. K P Turnquest told Tribune Business there was a clear conflict between Tiger Wu’s appointment and CCA’s status as Baha Mar’s largest unsecured creditor when the project filed for Chapter 11 bankruptcy protection in June 2015. He described this as “very unfair” to the Bahamian creditors, especially those local contractors who were hired as sub-contractors by CCA, given that the latter could use its position on the committee to ‘beat down’ the value of their claims. Mr Turnquest said that apart from being able to exploit its committee membership to ensure it was See pg b4
Has seat on panel despite being $72.6m creditor FNM deputy: ‘Very unfair’ to Bahamian creditors Fears it will ‘beat down’ compensation for locals
K Peter Turnquest
NewCo2015 seeks 25% higher charges for call termination By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Bahamas Telecommunications Company (BTC) has begun battle with its new mobile rival more than a month before the latter launches, with the two differing sharply over its initial termination rates. BTC, in feedback to industry regulators, is urging that NewCo2015’s termination rates be set at “the same level” as its own, arguing that to do otherwise would harm Bahamian consumers and distort the newly-liberalised mobile market. But NewCo, for which
BTC blasts NewCo call as ‘distorting’ market Wants end to higher rates when rival hits 15% share Cable Bahamas has Board and management control, is arguing that it should be allowed to charge termination rates that are 25 per cent higher in the shortterm to enable it to “establish market position”. See pg b6