By Latrishka Thomas
Noting the conversion of the State Insurance Company from a statutory firm to a private company that was renamed State Insurance Company Limited (SICL), the government said it will no longer allow the entity’s pension plan to remain, and has deemed the end result of the plan to be untenable.
“The Cabinet has indicated that the end of the life of State Insurance as a statutory corporation has come. It is replaced by the laws governing private companies and, therefore, the contributory pension will continue. The workers will receive the amounts that are contributed by State Insurance as well as the amounts that they contributed – as is the case in any pension plan – and they will of course receive … Social Security payments, so that they will receive two pensions rather than three,” Chief of Staff in the Office of the Prime Minister Lionel “Max”’ Hurst said at the post-Cabinet press briefing on Thursday.
On Wednesday, the top management of SICL and the Chairman of its Board were invited to Cabinet to discuss the troubling impact of the firm’s pension plan on the survivability of the company.
During the press briefing, Hurst explained how the former statutory body arrived at such a predicament.
“It appears that in the negotiations with the unions that the management succeeded in making very generous awards to itself and to its staff as well … and this goes back to its founding after 1977.
“At that time, those government employees who came over to State Insurance were regarded as people who had been seconded. Now what they claim is that at the end of their working life, they are not only entitled to a government non-contributory pension but that they are also entitled to the contributory pension which they paid at the State Insurance and of course they are also entitled to Social Security payments and so they would, in essence, be receiving three pensions. That is unheard of,” Hurst said.
The Cabinet notes stated that as a result, after two decades of making those payments, “all of the assets of SICL would be consumed by pensions” and that would render the company bankrupt.
In fact, in just this year, SICL would have had to pay out over $14 million in pensions, Hurst revealed.
“We are of the view that in 20 years State Insurance could no longer exist because it would be paying in pension payments amounts that exceed what is normal in Antigua and Barbuda. This is especially so instead of receiving a government pension, what they have now done is to calculate how much they would receive as a pension from the contributions made while employed by the State Insurance and if that pension is lower than what it would be if they were government employees.
“State Insurance then contributes the additional amount so that it brought up to the amounts which the government would have paid them and it extends not only to those who were once government employees, but everyone who is a part of the State Insurance family and that would leave State Insurance broke,” he concluded.
On January 27th 2019, the statutory body was placed under the control of the National Asset Management Company (NAMCO), an asset-holding and consolidated management corporation wholly owned and directed by the Government of Antigua and Barbuda.