$1B lump sum for 1,300 Petrotrin retirees

NEARLY 1,300 axed Petrotrin employees are expected to retire early next month and receive a pension totalling $1 billion, says Energy Minister Franklin Khan.

He was responding to a question Tuesday from Opposition Senator Wade Mark on reports the Petrotrin Employee Pension Plan (PEEP) will run a $2.73 billion deficit if wound up and what was being done to address this issue.

Khan said the PEPP being fully funded was only the case when Petrotrin and the plan were ongoing entities.

"The restructuring of PEPP and the termination of all employees changes everything in that benefit payments are accelerated significantly by the early retirement of all qualifying members."

He said it was not possible to wind up the PEPP and secure benefits by buying annuities as suggested by Republic Bank because the insurance market "has nowhere near sufficient capacity."

Khan said the $2.7 billion deficit quoted by Republic Bank was predicated on annuity buy-out taking place and this was not relevant. He added there was no alternative other than PEPP being run off as a closed fund meeting benefit payments from its assets when they fall due.

He reported nearly 1,300 members aged 50 and over are expected to retire on December 1, 2018 with a lump sum payment of $1 billion.

"I am pleased to announce that PEPP has comfortably enough assets to cover these payments."