Republic Bank’s Trust Services Division has threatened to wind up Petrotrin’s employees pension plan, should the company fail to address several issues, which include a prediction that the fund would be “exhausted” in the next 23 years. The bank said unfunded liabilities would be approximately $4 billion.
The bank’s concerns were contained in a letter dated November 20, and addressed to Petrotrin chairman Wilfred Espinet.
Republic Bank, which is a trustee of the pension fund, said in its letter that the fund’s “solvency deficit” as of September 2016 stood at a staggering $2.73 billion, up from $501 million in 2013.
The letter said, “The current solvency position of the plan is likely to be impacted by the termination of all employees and granting of full pensions to all members above 50 years old without any actuarial reduction.
“The trustee is very concerned that due to Petrotrin's intention to cease all operations, if the plan is run as a closed scheme (based on the actuary’s most recent estimate as advised at the meeting on November 15, 2018 assuming the fund yields 4 per cent per annum), the fund will be exhausted in 23 years with unfunded liabilities of TT $4.0 billion.”
The letter said there would therefore be no remaining funds to pay any outstanding benefits from that time, and as a trustee the bank "considers this position to be alarming.”
Oilfields Workers' Trade Union (OWTU) president general Ancel Roget said the effect of winding up the pension plan would be “catastrophic” to both the employees and the nation.
“They are going to go the court to get the pension plan. The consequences of that would be catastrophic: nobody would be able to get anything – neither pensions, or lump-sum payments – when you retire. Those who had retired before would not be able to get anything, because all of those matters would be tied up in the court, and that should be prevented.”