Former Bahamas Electricity Corporation (BEC) Board member, Dionisio D’Aguilar, said that public sector trade unions are “fleecing and bankrupting the country” through unsustainable and non-contributory pension schemes. He gave an example that BEC staff were earning benefits amounting to more than 25 percent of their salaries.
Mr D’Aguilar said government needs to tackle the non-contributory, defined benefit pension plans that are so common in the public sector, as these were unsustainable and could not be afforded by a cash-strapped government. Non-contributory pension plans are paid 100 per cent by the employer/sponsor, with the employee contributing nothing.
In a Tribune article Mr. D’Aguialr was quoted: “It’s absolutely critical that you have these pension reforms. These unions are fleecing the country. It’s completely out of hand. The costs of these pension plans are bankrupting the country.”
As an example, he pointed to the financially-struggling BEC. The company’s accounts for its 2010 financial year showed that the pension fund had an unfunded liability/deficit of $31.11 million. This represented an increase upon the $26.54 million and $22.829 million deficits for 2009 and 2008, respectively.
Mr D’Aguilar backed comments made to Tribune Business earlier this week by leading Bahamian accountant John Bain, who warned that the days of non-contributory pensions “are over”.
Knowing that politicians typically became scared when confronted with militant-minded unions, Mr D’Aguilar pleaded with government: “Do what’s in the best interests of the country, not what’s in the best interests of a select group of citizens.”
