Khan accused of misleading on Petrotrin pension plan

PRESIDENT General of the Oilfield Workers Trade Union (OWTU) Ancel Roget has contradicted statements made by Energy Minister Franklin Khan that the Petrotrin Employees Pension Plan is safe.

Roget said the plan is in deficit and in need of contribution because no vacancies at the company were filled since 2015. He said temporary, casual and contract workers do not contribute to the pension plan. He said the plan to send all contributing members home will throw the plan into further destructive mode.

He said the trustees were right to express concern about the plans to change the provisions as it winds down. He said the plan would be required to pay $1 billion lump sum payment to workers when the company ceases to exist on December 1. However, there are concerns that it may run out of funds in the next 25-30 years. He said if the government and board has spoken to the union before making their decision to restructure Petrotrin, they would have been able to come up with a better arrangement to have the plan funded so workers could get the type of benefits they were guaranteed.

“They (government/board) would like the country to believe the plan is properly funded. Politicians who don’t know, who are misled, is misleading themselves that the plan is over funded. That is not true. That is just propaganda to allay the fears and concerns of the public they are misguiding. There are many issues with respect to the viability of the plan as it is today and if they go ahead with the manner in which they are proceeding that would only cause more mayhem and confusion,” Roget said.

Republic Bank Ltd, the trustee for the plan, has written to Petrotrin’s chairman Wilfred Espinet expressing concern that the plan could end up with a $2.73 billion deficit if it is wound up and transformed into a closed plan.

The trustees told Espinet the operation of the plan as a closed one is likely to result in it being unable to meet all benefit obligations in the future and pointed out if they were to wound up rather than continue as a closed plan, this may enable a fairer split of the plan’s assets.

In the Senate on Tuesday, Khan, responding to questions from the opposition said the plan has comfortable enough assets to cover benefit payments well into the 2040’s, according to actuarial projections. Beyond that, he said there may be a deficit but its too early in the game to speak that type of language.

He said Petrotrin and the trustee are discussing the situation to ensure the plan’s obligations are met in the future.

The minister said the $2.7 billion deficit quoted by Republic Bank was predicated on annuity buy-out taking place and this is irrelevant.