Thursday, December 24, 2009

Bitter-sweet $400M gift

By Clint Chan Tack and Richardson Dhalai Thursday, December 24 2009

GOVERNMENT yesterday gave former Caroni (1975) Limited workers an early Christmas gift by making $400 million available to Republic Bank to pay them their pensions. Minister in the Ministry of Finance Mariano Browne yesterday described this gift to the former sugar workers as all part of Government “maintaining the promise” which it made to them since Caroni was closed six years ago.

However, several former workers said they were still bitter over the payments which were due to them since 2003 and would only believe in Government’s gift when they get cheques in their hands. 

In a statement yesterday, Caroni CEO Deosaran Jagroo said Government had finalised the pension arrangements for an estimated 10,508 beneficiaries. He said Government is making $400 million available to Republic Bank to meet the cost of annuity purchases. This process is expected to be completed by March 31, 2010. 

Republic Bank purchased annuities effective July 1, 2008 from Clico to secure the benefits payable to approximately 7,651 former daily-paid Caroni workers. Resources were placed into a separate reserve fund to be held by the bank to meet the annuity purchases of a further 2,857 daily paid former workers. The resources would remain in the fund and after seven years, would be wound up. The assets would be transferred to the Finance Ministry which would assume responsibility for meeting any legitimate claim. 

Jagroo said this was the culmination of intense collaboration and detailed verification exercises between Caroni; the insurer, Colonial Life Insurance Company (Clico); Republic Bank and actuary Bacon Woodrow and De Souza Limited. He added that Government and Caroni are confident that the guarantee arrangements that it put in place with Clico are “safe and sustainable.” 

In addition, 1,284 leases for agricultural lands will be given to former Caroni workers by January 31, 2010. In terms of residential lands promised to the ex-sugar workers, 2,042 offers have been made. Once accepted, the leases for these lands would be delivered to the former workers on or before March 31, 2010. 

Browne said the Government was simply living up to the pledge it made to the former workers regarding the shortfall in Caroni’s pension fund, agricultural and residential properties. “Government is doing what it said it would,” he stated. 

Former Caroni employee Ramesh Karpan, who was employed with the company for 32 years, is not buying into this promise and would only believe that ex-workers would be paid the sweetener pensions, “when I see the cheque in my hand. 

“This thing should have been paid since 2003 when they closed up the company or if they know they couldn’t make the full payments, then a little something each month until they pay it off. As it is, people dead before they could get their pensions,” he said. 

Karpan, who said he was also a union officer who had encouraged workers to contribute to the pension-plan, said former colleagues would now curse him whenever they spoke about the pension plan. 

“ One of them tell me he contribute twenty thousand to the plan and he can’t see that money. Every day is cuss whenever he see me,” he added. 

He also slammed Government for its inequitable treatment of workers in the distribution of residential lands saying they had been informed that they would have to pay between $3,000 and $4,000 for legal and other fees, and then would have to come up with a further $20,000 to $30,000 within 90 days if they were to access the lands. 

“And then on top of that, they are telling us that if we don’t build by a certain time, they will take back the lands,” he said. 

“It seems that they are putting things in place so that former sugar workers would not be able to get these lands and then they will tell the national community that they did all they could to help us,” he said. 

In full agreement was another ex-worker Soogrim Karpan, who was also employed for 32 years and described Caroni’s announcement as “ole talk” which had initially been used to entice workers to accept the 2003 VSEP package. 

“I wouldn’t believe that until I get that,” he said, adding, “You telling me that a big government who plan big summit in less than a year have to take six years to pay people who work for them,” he asked. Both men’s views were echoed by All Trinidad General Workers Trade Union (ATGWTU) president general Rudy Indarsingh who said wrangling between Government and the company had forestalled the pension plan payments for over six years. 

“This just goes to show that the closure of Caroni Limited was a rush job an they had no plans on how to pay the workers, give them their lands or set them up in new businesses,” he said. He also countered that some 18,000 lots had been transferred to the Estate Management Business Development for distribution and, to date, “not a single lot of land” had been distributed. 

At the signing ceremony for the Clico/Caroni pension plan at the Hyatt Regency, Port-of-Spain on May 15, this year, Finance Minister Karen Nunez-Tesheira said the new pension arrangements would bring “security and comfort to a significant number of former Caroni workers.” Apart from the systemic risk which Clico posed to the economy then, Nunez-Tesheira said Government intervened to provide liquidity support to Clico to protect the interests of pensioners and other investors such as the former Caroni workers.

Ramesh Karpan