#TurksandCaicos, March 18, 2022 – Mr. Speaker, I am pleased to present the Public Sector Employees Pension Fund Bill 2022, on behalf of the Public Service and the wider public sector of the Turks and Caicos Islands.  The presentation and anticipated approval of this Bill will mark an important date in the history of the public service of the Turks and Caicos Islands.

Mr. Speaker, it goes without saying that the Public Sector plays an integral role in supporting the government of the day in carrying out its mandate in all facets of society, including education, healthcare, security and safety in these islands.

Mr. Speaker, I am sure that I speak on behalf of all members of this Honourable House in expressing our sincere gratitude to public sector workers across the Turks and Caicos Islands for the important roles that they play and believe that it is the right of every public sector worker to not only be provided with the tools that allow them to appropriately carry out the roles that are recruited to do, but that they also receive fair compensation and benefits for doing so.

The public service underwent a number of changes in previous years including a significant reduction in manpower as well as revisions to civil servants’ pay and benefits in 2012 due to fiscal hardship experienced at that time.

Since 2012, the civil service benefited from the implementation of a new pay and grading system, an across the board salary increase as well as a number of other investments, however the implementation of this new pension and gratuity program will mark a milestone achievement.

The Public Sector Employee Pension Fund Bill 2022 is being proposed to create a Defined Contribution Pension Plan for Public Sector workers.

Prior to April 6, 1992 the Turks and Caicos Islands Government provided a fully funded Public Service Pension to all employees.

This practice ceased on April 6, 1992 when the National Insurance Scheme was established.  However, post 1992 employees were still paid a gratuity for their years of service.

This practice however, ceased during the interim period in 2012 due to the government’s fiscal instability at that time.

This resulted in post 1992 employees during the period April 2012 to present, with the exception of vacation pay which is nonexistent for unwell persons that would have utilized all of their leave, not receiving any form of terminal benefit for their years of service to the government and people of these islands.

This has caused numerous concerns as there is a disparity in the benefits received by different persons in the civil service; a number of which have expressed difficulty in being able to transition into retirement at the age of 60 as there is no payment to assist as was previously the case.

Additionally, if a person passes away while in service there is no benefit to be received by their families, some of which are young children that still require significant care and financial resources.

Whilst persons post 1992 are entitled to a NIB Pension, this alone is considered to be inadequate as the maximum payment is 60% of final average insurable earnings, with those who earn more than the ceiling,  now $4,000 per month having an even lower replacement rate.

As the current situation caused hardship on a number of public servants and has had the impact of demoralizing public servants, a Benefits Committee was established under the Chairmanship of the Deputy Governor in 2018 to review the feasibility of the reestablishment of a Turks and Caicos Islands Government Pension and or Gratuity Program for its employees.

The Office of the Deputy Governor in the financial year 2018/2019 received funding for a consultancy to assist in carrying out a Review Towards the Reestablishment of a TCIG Pension and Gratuity Program resulting in the award of a contract to Morneau Shepell now Lifeworks.

In March 2020 a report was presented to the Cabinet which gave options for consideration, with the Defined Contribution Program being the preferred option and a request for funding for implementation.  The report and recommendations was noted by the then Cabinet.

In May 2021 the report was presented to the Cabinet again with a request for implementation, subsequently resulting the approval of $2m for seed funding for implementation.

The Pension and Benefits Committee consisting of membership from the Ministry of Finance, Chambers, HR, the Treasury, and Senior Permanent Secretaries held over 20 meetings throughout the intervening period to consider options, to make policy recommendations and to carry out consultation with the CSA, Statutory Bodies, general public service and private sector regarding implementation.

The result of which is the presentation of a Bill today which not only encompasses the public service and interested statutory bodies, but also makes provisions for participation by the wider private sector in these islands thereby creating at some later stage a TCI Multi Employer Pension Program.

This Bill seeks to establish a defined contribution pension fund for public sector employees. The purpose of the Fund is ensure that eligible public sector employees are provided with some form of benefits when they leave the public sector due to termination, resignation, retrenchment, retirement or become disabled or that the benefits is paid to their beneficiary if the officer dies.  Most public sector employees do not currently have an employer linked pension arrangement. This plan is being established primarily to supplement employees NIB Retirement benefit, enabling them to have additional income in old age. It is also intended to provide an option for public sector employees to save more than the minimum required and have those savings professionally invested at a reduced cost. The Fund will work like a savings account. Every month members and their employers will pay mandatory contributions into the into Fund at the rate of 3% employee and 3% employer. In addition to the mandatory contribution, members will also be able to make voluntary contributions to the Fund. The maximum voluntary contributions deductible from salary is 10%.  The Board or invest managers will then invest this money so that it grows. The money made from investing the contributions is added directly to members’ accounts in the form of interest.

Mr. Speaker, the Bill is made up of six Parts.

PART I of the Bill contains the preliminary provisions. Clauses 1 and 2 of the Bill make provision for the short title, commencement and interpretation.

PART II of the Bill establishes the Public Sector Employees Pension Fund. It sets out the purposes of the Fund. It makes provision for membership of the Fund and management and administration of the Fund. It provides that in the Fund shall be held by the Public Sector Employees Board in trust for the members of the Fund. It also provides for payment of contributions into the Fund. The contribution payable to the Fund shall be 3% of the employee’s monthly salary and 3% will be contributed by the employer. Members can also pay voluntary contributions into the Fund of up to 10% of their monthly salary.

PART III of the Bill provides for the payment of benefits. The following benefits are payable, namely: normal, early and late retirement benefits, disability retirement benefit and benefits to a member’s beneficiary on the death of a member etc.

PART IV of the Bill establishes the Public Sector Employees Pension Board, which is the body charged with the responsibility of administering and enforcing the provisions of the Ordinance and management of the Fund. The Board is vested with several responsibilities including that to administer the Fund. The conduct of business and affairs of the Board shall be as provided in this Part.  Clause 37 to 53 contain provision outlining the composition of the Board; the functions of the Board, meeting and the procedures for meeting, as well as how decisions are to be made by the Board.

PART V of the Bill sets out the financial provisions applicable to the Fund. These include accounting and audit procedure. It sets the requirements for financial statements, annual reports and actuarial review of the Fund. The Board is required to carry out periodic reviews of its operations and to submit a report of such to the Governor and the Minister. The Minister shall cause a copy to be laid before the House of Assembly

PART VI of the Bill contains Miscellaneous provisions and deals with a number of general provisions. Clause 60 to 70 makes provision for how claims are to be made, determination of claims and questions, correction of mistakes, confidentiality, etc.

Some of the benefits of this new program is that:

• Savings accumulate over persons’ career
• Both the employer and the employees contribute; although TCIG has taken a decision to cover the full costs on behalf of its employees
• Benefits for early exit, death and disability are easily offered
• Voluntary additional employee contributions are possible
• There are Portable benefits

Under the new scheme 6% of employees basic salary will be paid into the pension scheme for their benefit.

Government has also taken a decision to compensate all current employees for their previous years of service by approving a 3% past service credit for all years previously served.

This is just a few of the benefits under this new program, which will make a monumental change for the benefit of the public service in these islands.

This legislation marks the beginning of a new and very important chapter for the public service of the Turks and Caicos Islands.

It has taken a lot of hard work and a commitment to significant financial resources to allow us to be where we are today, but we are proud of this initiative and truly believe that it will be to the benefit of the public service of the Turks and Caicos Islands.

We are grateful to the government of the Turks and Caicos Islands for supporting the implementation of this new program through:  the funding of the initial consultancy; funding of $2m for the initial deposit into the new Pension Fund; the commitment to cover both the employee and employer contribution to commence this program and the commitment to fund the past service credit of approximately $23m to compensate all current staff for their previous years of service.

We wish to record our thanks to the members of the Benefits Committee chaired by Her Excellency Anya Williams for their hard work, dedication and commitment to the establishment of this program, in particular the Attorney Generals Chambers led by the Attorney General Honourable Rhondalee Braithwaite Knowles, Senior Legislative Drafter Ms. Desiree Downes; Permanent Secretary of National Secretary and former Director of the Deputy Governor’s Office Mr. Tito Lightbourne; Permanent Secretary of Finance Mrs. Athenee Harvey-Basden; Permanent Secretary of Education Mr. Wesley Clerveaux; HR Director Mr. Mark Greenway; Accountant General Mr. Hemant Sinanan and Managing Partner of Life Works Mr. Derek Osborne, all members of the TCIG Benefits Committee.

We also express our thanks to the President and members of the Civil Service Association in particular Mr. Demarco Williams for his support throughout and to the entire public service for their patience and understanding while we worked tirelessly to bring this program to fruition.

Today is a good day for the public service of these islands!

RESPONSE TO THE DEBATE

Mr. Speaker, some portions of today’s debate brought to mind that old saying, “Don’t let perfect be an enemy of the good”.

Mr. Speaker, I almost got up on a point of order to say complain that I was being accused of improper motives.  Not at all Mr. Speaker, nothing of the sort.  Mr. Speaker, this Bill does not seek to exclude any public office holder, elected or otherwise.

In fact, Mr. Speaker, the Bill defines the Minister as the Minister of Finance in section 2.

Clause 57. (1) of the Bill the Board is required to —

(a) prepare a report with regard to the state of affairs, the business and the financial position of the Fund, the degree in which the purpose of the fund has been furthered and of its activities during the last preceding year and shall furnish that report to the Governor and the Minister not later than the 30 September.

(b) submit to the Governor, the Minister and the Chief Auditor every account certified by the Auditor together with the report of the Auditor thereon, within one month of such certification;

(c) submit annually to the Governor and the Minister an account of the securities in which monies of the Fund are for the time being invested.

Mr. Speaker, as I indicated in my address, it is the Minister shall cause a copy of every account or report submitted to him under this section to be laid before the House of Assembly.

Additionally, in respect of the actuarial review of operation of Fund, clause 58. (1) of the Bill further requires the Board, with the assistance of an actuary, to review the operation of this Ordinance during the period ending with 31 March in every third year; and at each such review shall make a report to the Governor and Minister on the financial condition of the Fund and the adequacy or otherwise of contributions to support benefits, having regard to its liabilities under the Ordinance.

The Minister must then, as soon as possible after receiving a report in accordance with subsection (1), lay a copy of it before the House of Assembly.

The fundamental principle that underpins the drafting of this Bill Mr. Speaker, is found in the Constitution.  A provision that has been in our Constitution since the very first Constitution and not connected to any allegation or aspirations against anyone.

Mr. Speaker, that grant and withholding of pensions, etc. is captured in section 96 of the Constitution which provides that:

(1) The power to grant any award under any pensions law in force in the Islands (other than an award to which, under that law, the person to whom it is payable is entitled as of right) and, in accordance with any provisions in that respect contained in any such law, to withhold, reduce in amount or suspend any award payable under any such law is hereby vested in the Governor, acting in his or her discretion.

(2) In that section “pensions law” means any law relating to the grant to any person, or to the widow or widower, children, dependants or personal representatives of that person, of an award in respect of the services of that person in a public office, and includes any instrument made under any such law.

That it Mr. Speaker, nothing more. Nothing sinister.

Mr. Speaker, the Hon. Leader of the Opposition has only recently reminded us, this aphorism: “don’t let perfect be an enemy of the good” which is an old Italian proverb first made popular by Voltaire who used it in his poem La Bégueule. The literal translation is, the best is not the enemy of the good.

Other philosophers and writers have expressed the thought in slightly different ways. Confucius: “Better a diamond with a flaw than a pebble without.”  Shakespeare: “Striving to better, oft we mar what’s well.”

Mr. Speaker, we know that perfection is impossible to achieve, so pursuing it is sometimes counterproductive, inefficient and produce diminishing returns. We need to know when good is good enough.

Obviously, there are situations when setting the highest standard is important. I want my pharmacist to be fastidious when filling my prescriptions and pilots should be perfectionistic when evaluating a plane’s airworthiness.

But Mr. Speaker, don’t let perfect become an enemy of good and Mr. Speaker, the majority of members’ contributions have shown, this is very good bill and something that we can and should all be proud of.

Mr. Speaker, there are 2,437 established and waged positions budgeted in the public service, including the RTCIPF.  This Bill would ensure that those persons have a pension and gratuity when they leave public service, not to mention the many other persons employed across the public sector.

Mr. Speaker, save for about 100 of those persons who are eligible for pension under the Pensions Ordinance and the minority who are entitled to gratuity, every other person would leave the public service without anything at all, no matter how long or how well they have served.  Mr. Speaker, under these proposals, it doesn’t matter if a qualifying person resigns, is terminated, retires, is made redundant, or however he or she leaves the public service with something. And if, God forbid, he or she dies, his or her beneficiary is able to receive a benefit.  Mr. Speaker, this is a very good Bill.

Mr. Speaker, although I am proud to be a member of this Honourable House, I am not a politician and I do not subscribe to the politicization of these proposals because I made clear in my address to the Bill that the former and the current administrations had a role to play in bringing this Bill to the House today.   Mr. Speaker this Bill arrived here today following a collaborative, consultative process, having had the benefit of professional advice and careful consideration.   Further careful consideration will have to be given to what to do for those persons who left the service without anything at all, but Mr. Speaker, the government should rightly be proud of this initiative Mr. Speaker because this is a watershed moment in the sense that it marks an important historical change of course and an important development toward retirement security for current and future public sector workers.

Pension (Amendment) Bill 2022

Mr. Speaker, on behalf of the Public Service, I am pleased to present the Pension (Amendment) Bill 2022.

This Bill seeks to amend the Pensions Ordinance to provide the circumstances in which pension may be granted under the Ordinance to a public officer employed in the public service prior to 6th April 1992 and to restore the option for a public officer to whom a pension is granted under the Ordinance to elect to be paid a gratuity and reduced pension.

Mr. Speaker, prior to April 6, 1992 the Turks and Caicos Government provided a fully funded pension to all public officers appointed to permanent and pensionable posts.  That program remains in place for all persons appointed prior to 6^th April 1992 permanent and pensionable public officers save that an amendment was made in 2012 which removed the right to elect to receive a gratuity payment and a reduced pension.

The above amendments ensure that all 100 persons currently enrolled in the previous pre 1992 program are secured their right to apply for a pension and have the opportunity to benefit from a gratuity payment.

Clauses 3 of the Bill seek to amend the section 6(a) of Ordinance by repealing and substituting subparagraph (i) to provide that pension or gratuity may be granted to an officer who retires from the public service on or after he attains the age of sixty years or after completing thirty years of service, or in special cases with the approval of the Governor, fifty-five years.

An officer who retires on completing 30 years of service and to whom a pension is granted may in lieu of such pension be paid, immediately upon his retirement, a gratuity calculated in accordance with regulation 23 and reduced pension calculated in accordance with regulation 23 after he attains the age of sixty years.

Clause 4 of the Bill seeks to amend the Ordinance by repealing and substituting section 8 to provide for compulsory retirement at any time after attaining the age of sixty years or after completing thirty years of service, or in special cases, with the approval of the Governor, at any time after attaining the age of fifty-five years.

Clause 5 of the Bill seeks to repeal section 13 which provides that pension granted under the Ordinance may cease on imprisonment of the person to whom a pension has been granted.

Clause 6 of the Bill seeks to amend the Pensions Regulations contained in the Schedule to the Ordinance by repealing and substituting regulation 23 to restore the option for a public officer to whom a pension is granted under the Ordinance to elect to be paid a gratuity and reduced pension.