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Finance

Public Sector Pension Plan at $14.71 Million in Year One

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By Dana Malcolm 

Staff Writer 

 

 

#TurksandCaicos, May 19, 2023 – The first ever payouts have already been made from the new Public Sector Employees Pension Plan totaling over $162 thousand; it means civil servants are finally reaping post retirement benefits after years of agitating for a more comprehensive package.

The news was shared by E Jay Saunders, Deputy Premier and Finance Minister during the 2023//24 budget debates on Tuesday May 16th.

The fund was introduced in March of 2022 to begin in the 2022/23 financial year and saw a 10 percent pay increase for civil servants split 60/40, with the 60 being placed into the new retirement fund.

Saunders laid down the numbers first for residents; On the establishment of the fund in 2022 the Government seeded $7.9 million.  As the employer, the Government then contributed – over the past year – another $4.5 million; the employees contributed $2.4 million and the employees pension on wages was $2.24 million in cumulative contributions by staff.

“But would you believe this pension fund that we just started a year ago has already paid out pension benefits in the [amount] of $162 thousand?” He asked.  That cash was disseminated between 21 public sector retirees in year one.  Saunders described it as another way the Government was delivering on the Citizens’ Contract.

The fund had been created to restart the Government mandated pension program which had been cut in 1992, with the introduction of the National Insurance scheme though payouts still remained for some.  When the Interim Administration arrived in 2012, those benefits were discontinued for many pensioners, reported Rhondalee Braithwaite Knowles, Attorney General, when she laid the bill in 2022.

The Public Sector Employees Pension Plan is a complement to the retirement payouts from the National Insurance Board, NIB, which were deemed insufficient.

The pension fund is accessible to any individual who has left the public service be it due to resignation, dismissal, redundancy, disability, or retirement.

Finance

MINISTRY OF FINANCE, INVESTMENT & TRADE DORMANT ACCOUNTS FILING DEADLINE

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#TurksandCaicos, March 27, 2024 – The Inland Revenue Department (IRD) in the Ministry of Finance, Investment & Trade reminds the general public that all funds in dormant accounts held by any financial institution on the Islands are transferrable to the Turks & Caicos Islands Government (TCIG) which became effective 1 December 2015.

An account is deemed to be dormant if no transaction, as defined under Section 4 of the Dormant Accounts Ordinance 2014, has been effected on that account in seven (7) years.  Financial Institutions, is required by law, to issue several notices of accounts held that are deemed to be dormant under the Ordinance.

Account holders who are uncertain of the status of their accounts, are encouraged to contact their financial institution(s) for verification.  Please note that Section 10 of the principal Ordinance was amended by inserting 10A which stipulates:

‘A claim against the Government under section 10 for repayment of monies transferred from a dormant account shall not be brought after the expiration of six years from the date the money was transferred to the general revenue of the islands.’

As such, a dormant account holder no longer has an indefinite period in which he/she can make a claim to the Permanent Secretary, Ministry of Finance, requesting funds transferred to the TCIG.

Financial Institutions are also required to remit balances of all Dormant Accounts as defined under Section 4 to TCIG annually on or before March 31st along with a Certificate of Compliance.

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Finance

TCI Finance Launched at Corporate Event

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Dana Malcolm

Staff Writer 

 

#TurksandCaicos, March 21, 2024 – The Turks and Caicos must diversify its income and TCI Finance will play a key role in that process according to Paul Pirie, CEO of the company. Pirie was speaking at a March 4, corporate launch.

“During the pandemic it was painfully obvious the need for economic diversification— our very close neighbors the Cayman Islands came through the pandemic pretty unscathed economically and that’s because of their diversification,” Pirie highlighted.

He maintained that financial services were an incredibly resilient industry pointing out record years of profit recorded by banks like JP Morgan during the pandemic.

“Financial services make money in any condition,” he stressed.

TCI Finance was born out of recommendations from a 2018 review of the local finance industry and Pirie revealed its mission and vision. The mission of the two-man organization is to protect, promote, develop and grow the TCI financial services industry through engagement and collaboration with domestic and international governments, regulators, organizations, citizens and media.

The vision was to create a sustainable and inclusive financial landscape, delivering elite financial services to forward thinking investors and a place where businesses, communities, families and ecosystems thrive together.

In order to successfully carry out its mandate TCI Finance identified four core pillars to work off of including Proper financial infrastructure, growth of existing businesses, innovation and marketing.

The CEO explained that outside of diversifying the economy, the exponential growth in businesses and capital locally would need matching growth in the financial services sector anyway.

“We can all see around us the incredible growth that’s happening on the islands right now but this growth requires a huge amount of ancillary services. A service critical to any economy is financial services,” he continued “it’s much more than banking. I’m talking about regulatory compliance, wealth management, investment banking, insurance, accounting, auditing. It’s a huge array of services.”

Pirie maintained that despite great potential, right now the TCI isn’t the place of choice for finance.

“I asked our compliance team [at JP Morgan] would you consider doing business in the Turks and Caicos and they said absolutely not; not because it has a bad reputation because its not on the list.”

The goal then, of TCI Finance, the sister agency to Invest TCI, is to establish the islands as a key player on the global finance map. TCI Finance does answer to an established board of government and private sector reps. That board was introduced by Former Chair and Minister of Finance E Jay Saunders who oversaw the creation of TCI Finance. The Board includes:

  • Chair – Minister of Finance
  • Vice-Chair – David Stewart (in his capacity as President of the FIA)
  • Angela Musgrove (in her capacity as CEO of Invest TCI)
  • Athenee Harvey-Basden (in her capacity as PS, Ministry of Finance)
  • Niguel Streete (in his capacity as CEO, Turks and Caicos Financial Services Commission)
  • Drexwell Seymour, Certified Public Accountant
  • Mr Marcus Samuel (in his capacity as Chair of the Bankers association)
  • Sally-Ann Astwood (appointed by the Hon. Leader of the Opposition)
  • Ryan Blain (on behalf of the accountancy association)
  • Rochelle Musgrove
  • Ervine Quelch (corporate development, former NIB board member)

Washington Misick, TCI Premier and current Finance Minister maintained that this push was to make the TCI a leader in Financial Services.

”We want to be careful that our appetite for risk does not confine us to being followers,” he said.

Misick gave his full support to TCI Finance at the event.

”The government is committed to this and we will see it through regardless because at the end of the day the multiplier effect of having TCI Finance reverberates through the entire economy,” he maintained.

While it does this, Independent of the government and the private sector the team is foremost interested in helping local businesses and stakeholders according to Pirie.

“TCI Finance is here for you, the things you need come and see us, call us, email us. We’re here to help you. We’re a non-profit organization so we are here to help grow your business and help you attract new business.”

TCI Finance is located above its sister agency Invest Turks and Caicos Agency at Courtyard Plaza on Leeward Highway.

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Bahamas News

Bahamas NIB Minister explains dire situation and need for July increases

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Rashaed Esson
Staff Writer 

 

The Bahamas’ National Insurance Board (NIB) is facing financial issues, at risk of being unable to pay off its debts by 2028, as revealed by Alfred M. Sears, Minister of Immigration and National Insurance in the Mid-year Budget Performance report.

This unfortunate development is according to NIB’s 11th Actuarial Report, facilitated by the International Labour Organisation (ILO) and it is calling for swift solutions to restore the capacity of the NIB fund.

Sears, in a release of the report, published on March 7th, goes into the details of the NIB’s dilemma, saying that the Board’s annual income, which includes contribution and investment earnings, is not enough to cover its expenditure fee, inclusive of benefits and administrative costs, “especially in the Long Term (Pensions) Benefits Branch.

The contributing factors to the issue take different forms, Sears highlights. He refers to the decreasing working-age population and an increase in the elderly population, there is an imbalance. The ratio of active contributors to pensioners is currently at 3 to 1, meaning that every three workers are paying for a single pensioner.

Additionally, there is the decline of compliance; benefits expenditure dominating contribution income reductions in investment income, high administrative costs, women having fewer children, and individuals living longer and this simply means a much larger and unsustainable burden for the workforce to shoulder.

If nothing is done, future generations won’t be able to benefit from the NIB as they should.

It is for this reason that reforms are recommended and will be implemented, as advised by the Actuarial Review.

“The Review recommended that a significant increase in the contribution rate is required to pay the full benefits in 2028,” Minister Sears informed.

As a result, come Monday July 1st, 2024, “the contribution rate for NIB will be increased by 1.5%, to be shared equally between the employer and the employee, and thereafter a 1.5% increase Every Two Years from July 1, 2024 to July 1, 2044.”

This, according to Sears, will ensure NIB’s continued provision of necessary services and benefits to Bahamians. A reliable support system for the archipelago.

In fact, with this development, Sears points out that NIB is projected to see a surplus after 2030, when its annual income will exceed the projected expenditure.

The National Insurance Board minister mentions that it is massively important for Bahamians, standing as the foundation of the nation’s social welfare system, providing support to Bahamians when times are hard.

“It would be true to say that if it were not for the National Insurance Board so many of our citizens would not have survived through Hurricane Dorian and COVID-19. For example, between 2019 and 2021, the Government, through NIB, provided income supplement and unemployment assistance to thousands of Bahamians totaling $120 million and NIB itself paid out unemployment benefits, during this period, of $131.5 million between 2019 and 2021,” he maintained.

With the coming increase in contributions, Sears expressed he understands that it might be of concern to Bahamians, so he assured them that it is made to be reasonable and proportionate.

“The phased approach will allow for adjustments to be made gradually, giving each person time to plan and prepare accordingly,” he said.

In continuation, there is more coming beyond the increased contribution, according to Sears.

He said there will also be a comprehensive programme of reform of NIB which will include  “legislative amendments to the National Insurance Act, the National Insurance (Chronic Diseases Prescription Drug Fund) Act, the National Insurance (Benefit and Assistance) (Amendment) Regulations, and the National Insurance (Contributions)(Amendment) Regulations to strengthen financial sustainability and
accountability.”

Additionally, there will be more changes that are “a global and internal recruitment of qualified Bahamian professionals into the executive management of NIB,  to bring about transformative advancements in NIB’s “digital and IT infrastructure, better customer relations, more efficient and effective Human Resource management, reduce administrative costs and improve the investment strategy to produce a better rate of return.”

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