The Public Accounts Committee recently met to discuss a number of audited statements including the audit of the Turks and Caicos Islands Government. The report was very comprehensive addressing many issues; however, this article will just address three areas at this time namely, Disparity in Pensions, Unfunded Pension Liabilities and Debts Owed to TCIG
Major Disparity between Legislators, NIB Pensions and Civil Servants Pension
Last year, I wrote an article on the legislators’ pensions and I was highly criticized for the article. My article was not to embarrass the legislators but to encourage them to change the legislation as the current legislation is too generous and unfair to the average resident in TCI. You only have to serve any two terms in Parliament and retire at age 50 and get paid for life.
The National Audit report revealed that the average monthly pension for a NIB pensioner was $780, the average monthly pension for TCIG civil servant for $1,342 and the average monthly pension for a Legislator was $4,515. The payout to legislators for the 2017/18 increased from $632,000 to $1,000.000, an increase of $368,000. Should some of our parliamentarians retire in 2020, can you imagine what the increase in payouts will be.
A politician can retire at age 50 and does not have to work anymore for his or her life. A civil servant and a NIB pensioner retire at age 65 but the pension they will receive will not be able to meet their needs unless they have some significant savings. What a significant disparity?
I believe parliamentarians should put the electorate before themselves and if they truly care about you, they would amend the legislation from any two terms to three consecutive terms and reduce the disparity.
Folks does it seem right that you have to continue to work hard beyond the retirement age while the politicians can retire and enjoy life for the rest of their lives from age 50.
Millions in Unfunded Pension Liabilities
Even though the pensions that NIB pensions and civil servants are expected to receive are not that significant, individuals however, want some sort of security that when they retire and qualify for pensions, that the fund will be adequately funded to cover the payouts of their pensions.
However, based on the National Audit report, the combined unfunded pension liability for TCIG and NIB is $362million representing $94million for TCIG and $268million for NIB. This means that if there is no increase in the rate or if the Government does not provide additional funds to the Fund, then TCIG and NIB will not be able cover the payment of pensions and benefits to their subscribers in the future.
It is now time for a major review of our social security plan and it is also time for our government to fund additional funds to our scheme so funds will be available when you and your grandchildren retire.
Millions in Revenues Owed to Government including two major resorts
The National Audit report reveals that $164.5 million is owed to the TCIG. The three major areas are as follows: Hotel and Restaurant, $89,276,899, Business Licence Renewal $51,451,701 and Statutory Boards Net Revenue $5,272,140
Of the $89,276,899, the report revealed that two major resorts are in arrears in the amounts of $77 million and $8.8 million respectively.
I must say though that the Business Licence Renewal outstanding fees can be misleading. My understanding is if a company discontinue to operate and does not inform the Business Licence Department of their discontinuation, the billing system automatically generates a ten (10) percent penalty for these businesses and hence such high outstanding amounts. Some businesses are even changing their names and starting all over and will never pay the outstanding.
I think we need to have a software implemented that will automatically cancel a business licence if the payment is not made within six months of the renewal date. However, I do understand that it will require legislation to put this into effect.
While this report is for 2017/18 year end, they are not issues that just occurred in the previous financial year. These issues have been in existence for many years now. Therefore, we need to deal with them now rather than waiting until later as it may be too late. For example, the unfunded pension liability is a serious issue and has to be addressed immediately.