Government today announced it will compensate the 68 former employees of the defunct British American Insurance Company, who were left in the lurch without the contributions they had made to the company’s pension plans when it folded a decade ago.
Acting Leader of Government Business in the Senate, Senator Kay McConney, said that following BAICO’s closure, a casualty of the failure of its parent, Colonial Life Insurance Company (CLICO), insurance giant Sagicor Life Inc. had agreed to take over British American’s pension plans.
Senator McConney told the Senate: “The previous Government would have provided assistance to Sagicor Life to allow the preservation and payment of the pension plans for British American Insurance Company’s staff, to be preserved and paid, and the Government agreed to use taxpayers’ money to bail them out.
“Initially, under the British American Preservation of Investments Act 2016, section 6 spoke to the issuance of six promissory notes to Sagicor Life, but the judicial managers of British American Insurance appointed by the Supreme Court advised that Sagicor was no longer interested in receiving promissory notes and wanted bonds instead.”
With this amendment, McConney declared:”The Government has agreed and will in this bill propose the bonds to Sagicor Inc. to the tune of $8.115 million for the 68 employees to be issued in six tranches at 7.5 per cent interest.
“The six bonds are due for payment at various times between five and 30 years; the schedule outlines terms and conditions, and speaks to maturity dates from the date of allotment to five years, ten years, 15 years, 20 years, 25 years and 30 years.
“Three of them have a face value of $0.625 million, two are $3 million, and the other $0.24 million, and the funds for Sagicor to honour these will come from the consolidated fund.”
In commending the bill, Opposition Senator Caswell Franklyn questioned whether public servants who retired medically unfit would have their full pensions restored, noting that if Government was willing to assist the private sector with such matters, it should be more than willing to do so for its own workers.
Senator Franklyn told the Upper Chamber: “Every week I get calls from former public servants declared medically unfit who are supposed to receive their pensions, because if you are declared medically unfit in the public service you get a pension after ten years service but it is payable from any time as long as you have the ten years, so you don’t have to wait till you are 60 years old, they pay your pension immediately.
“If you have worked for more than ten years but less than 20, you get credited based on 20 years of service so the pension will keep you.
“Permanent Government workers do not get NIS sickness benefits because when NIS came in Government workers had a system where they could get full pay for a year if they were out sick.
“But the last administration took some bad advice and to this day, this bad advice is continuing, where if you receive your Government pension when medically unfit, the invalidity benefit is now called a pension, and your NIS pension is deducted from what you get from the Treasury.”
Senator Franklyn added: “I am beseeching the Government if they can give these people from British American their pension, some of whom have died, who Government had no commitment to, if it is good enough for people in the private sector, govenrment has to be more decent with its former employees.”
Deputy President of the Senate Senator Rudolph Greenidge, praised the Government for agreeing to pay the former British American staff members, especially in the wake of all the commitments it presently has.
But he also queried why the company found itself in that state and hoped that such incidents would not occur again in Barbados.
Senator Rudolph Greenidge said: “What has always puzzled me about the CLICO and British American fiasco was what level of reassurance, if any, was undertaken by these companies on behalf of their policyholders?
“They should have had an insurer properly insure them against exactly what happened to the policyholders.
“Barbadians still want to invest but they are afraid because of what happened in this particular matter as well as the collapse of Trade Confirmers Limited in the 1980s.
“In future, companies like these must be held to certain standards, especially regarding the investments they make with people’s money, which should be financially prudent and sound decisions.”
