Unfunded Government Pension a Worry

Fiscal Problem In Barbados ! eb2d17288e33d24ec34a90fd04dca0d0 Dr. Justin Robinson recently shared some interesting information on Facebook, he attempted to breakout government expenditure and revenues – see the presentation, ‘facts on the Fiscal Situation in Barbados last 20 years. A focus on Transfers and Subsidies‘.

Successive governments have been challenged by the size of the transfers and subsidies allocation and it has become more so in the last decade given the fiscal challenges being experienced. Although out of the scope the blogmaster used the opportunity to question the chairman of the NIS about government’s non NIS pension liability. Private registered pension plans AND the NIS receive input from actuaries to inform the level of funding required to ensure they are able to meet future obligations.

It is an open secret the pension plan which covers statutory agencies, members of parliament and other public sector agencies continue to be a significant pension expense for government. From arms distance the fund appears to be ‘under-funded’. This is the interesting point of the exchange on Facebook with the Chairman.

David King Interesting to see how you sliced the time series Sir. Was this by special request?
Justin Robinson I just went decade by decade
David King Do you have analysis of the pension expense for the same period for public sector separated by MPs, PSs, and other grades? Any info at all?
Justin Robinson the pensions were only broken out as a separate line item from the years shown. we can make some inferences. There is supposed to have been a sharp increase in retirements in the last five years or so.
Justin Robinson I am hoping that a comprehensive reform program is part of the campaign, so we can get buy in from the populace.
David King The concern by many is the existing burgeoning pension obligation.
Justin Robinson the unfunded pensions in the public service is a major issue that needs to be addressed. No doubt about that one. With pensions and interest, there has been less flexibility in terms of public expenditure than many think.
David King How is the pension managed? Who has oversight? Is it that the government has recourse to fund therefore there is no legal obligation to ensure the plan is adequately funded?
Justin Robinson the pensions mentioned are those not covered by the NIS.
Justin Robinson the public sector has a fairly large legacy of noncontributory pensions.
Justin Robinson as Philip mentioned persons have legal entitlements that were never part of a contributory scheme.
See full exchange on Facebook page – FB Senate

This is a highly technical issue and one worthy of public discourse to ensure an ignorant public is educated about one of the more hidden liabilities taxpayers and their children will have to honour in years to come. Here is a link to the approved 2017 -2018 Government Estimates. Select the Find option and enter the word pension, the size of the pension expense  of government will shock you.

The blogmaster is hopeful the BU intelligentsia will assist with the defogging of the issue.

104 comments

  • David

    Pensions are paid after you received a salary over the years !

    You cannot stifle the truth !

    Like

  • Economic environment is linked to salary and pensions!

    Like

  • http://www.trinidadexpress.com/20180119/news/trinis-party-on-despite-recession

    Our neighbors have economic challenges also !

    Not only Barbadians as David BU would have us believe !!!

    Like

  • @Adrian

    Taking into account the thousands OF HIGH PAID LOW WORK civil servants, ministers, board retirees etc. and the future 30 year liabilities are in the BILLIONS.

    My proposal to let the unfunded pension plans collapse make more sense now.

    Like

  • Fractured
    Trinidad in trouble because like the DLP, Kamla’s government was reckless and all about PR stunts. But Trinidad has a stabilisation fund with USD 5700 million though and gas prices on the up. In our case, Sandals will continue to operate tax free, keep most of their money off-shore and we’ll get departure tax and little spend from the all-inclusive traveller. The RH PR is over!!😜

    Like

  • Since the parasite MPs made the pension situation unfair , what has change, and how much concerned must john public be ? it seems the 17 years advantage is a curse to them.

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  • Wily, agreed.

    We need a total financial default to get rid of all local liabilities. We need a second independence day.

    Otherwise the plantocrats will go on enslaving the Barbadian taxpayer. The local elite, consisting of ministers, judges, high bureaucrats and their families and courtesans are free to move to Panama, Venezuela or Liberia to find new hosts to suck out. The same for all false businessmen wining for the taxpayer´s money.

    Like

  • Enuff

    Barbados in the current economic straits because of Liz Thompson & Mia Mottley bad development strategies ,

    Here is the clearest example :

    • Greenland. – $ 150 million wasted on a project that cannot be used after 20 years

    Yet tax payers still have to repay the debt up to this day .

    • Dodds prison – $ 700 million used to build this prison when MAM refused to heed advice to improve conditions at Glendairy

    Every January for the next 20 years tax payers have to look for $ 30 million to repay this debt

    Now can you imagine these 2 powderpuff GIRLS…….asking rational thinking Barbadians to return them to office ???

    Listen carefully……..Bajans had ENUFF … of these thieves !!!!

    Like

  • Fractured,

    You should also mention Lord Nelson, the Romans, aliens and dinosaurs. Surely, they are also responsible for the present malaise under the blue narrative.

    And do not worry that XY could steal any money from the taxpayer. The country is already drained and impoverised. There is nothing left for theft but shattered dreams and ruins.

    Like

  • Bernard Codrington

    @ David at 8 :41 AM

    Are you suggesting that the pension arrangements for ministers and politicians be reviewed going forward from 2018? I thought I was the quintessential optimist on this blog. But maybe Solutions will get a couple of seats if they add it to their manifesto.

    Like

  • Politicians should be rewarded for their GOOD performance in service to Barbados.

    How many members of parliament have served the country well ?

    Overpaid. Under performing parliamentarians do not deserve the pensions they are going to collect.

    Barbados is not Brunei.

    Like

  • Fractured
    Barbados debt didn’t start in 1994-2008. If after 10 years y’all still blaming the BLP for borrowing, notwithstanding wunna borrowed twice as much but with little to show, it is obvious wunna incompetent and need to go. Simple things that don’t require money wunna failed to do–like the promised regular press conferences, transparency etc. Wunna can’t even find candidates, as weeks before an election Todd has to be used to help complete the slate.😂😂 The PR stunting is over.

    Like

  • “David January 20, 2018 at 7:13 AM #
    Dr. Robinson reported that there was not breakdown in the T&S figure. Another guarded bit of information?”

    What does ‘not breakdown in the T&S figure’ mean?

    Like

  • Bernard Codrington

    @ David at 7 :13 AM

    Wearing my accounting hat( I am not a certified accountant) this Transferred and Subsidies line item seems to be akin to the Miscellaneous line item in corporate accounts in which items are hidden that should be disclosed.
    In economics the outliers are hidden in the last element in the linear equation represented by the Greek letter epsilon. If it is too large the reviewer asks for a dis-aggregation.

    To highlight that pensions as a significant contributor to GOB growing expenditure does require verification.

    Like

  • @NO and Bernard

    Seems a lot of fat in there.

    Like

  • Bernard Codrington

    Please substitute” are” for “as” in the last sentence above. EOE.

    Like

  • @NO

    You should give the Accountant General office a call on Tuesday to seek information on breaking out the T&S number.

    Like

  • @Blogmaster
    you should know one doesn’t accomplish much ‘on the phone’ in Bim. You have to go and see the people. Likely several times.

    The state of reporting in the public sector is at an all time low. Body after body with 1 annual report in the last 5 years. A few with zero. A few with 2. Almost none with all, the exceptions I have found are Deposit Insurance and Enterprise Growth Fund. The one common factor, is whenever an Annual Report is found, the term “despite the challenging economic conditions” will be found within the first 3 paragraphs.

    This is like throwing darts in the dark.

    Like

  • @Northern Observer

    Based on utterances from the minister of Finance Chris Sinckler that he is satisfied with the management accounts of the NIS we should not worry about the unavailability of audited financials.

    Like

  • millertheanunnaki

    @ David January 20, 2018 at 12:48 PM

    So the external users of financial info ought to rely on the word of a man who is in charge of the country’s finances but who is incapable of telling us the difference between 0.07 and 0.7, either expressed as a percentage or fraction?

    If the management reports are so reliable for decision-making purposes what is so technically ‘constraining’ to be holding up the audited financials other than the too often recurring presence of too many ‘unexplainable’ expenditure / payment transactions in the audit trail.

    When the idiot is able to account for that missing $300 million in foreign reserves since 2013 then people might start taking his utterances with a grain of ‘sweetened’ salt instead of utter contempt.

    Like

  • Enuff agreed Fractured Dunceand the Dems do not realise they are the Government as they still behaving like they are in opposition blaming everyone for their incompetence.The Dunce still harping about the prison and Greenland after 10 years in office,my god.I heard a Dem blaming heavy rain in 2016 for the problems on the South Coast.Last Sunday they had a PR show on Brass Tacks with Ms Haigh who is very good at PR and another lady talking about what should not be placed in the sewer but we need to hear from the engineers which I hope Starcom brings probably hosted by Mr Ellis instead of Mr Laynewho enabled those Guests to get away with murder last week.The other Talk show with the three Dems seems to be off the air which is good ,no longer listeners have to put up with loud mouth Mr Lovell or the pompous Dem Ms Holder.The Dems have borrowed twice as much as the Bees yet have not bought ,a Bus or Garbage Truck,so where has this borrowed money gone?

    Like

  • millertheanunnaki

    @ Bernard Codrington January 20, 2018 at 12:06 PM #
    “Wearing my accounting hat( I am not a certified accountant) this Transferred and Subsidies line item seems to be akin to the Miscellaneous line item in corporate accounts in which items are hidden that should be disclosed.”

    You might not be wearing a well-known brand of ‘accounting’ hat but you sure do come over as a ‘seasoned’ connoisseur of the intricacies of public finances.

    And it is for that expert ‘inside’ knowledge we would wish you to unravel the below cited circulatory puzzle of a convoluted mystery of public sector pensions funding fabricated by our resident pension expert, the guru @ Hal Austin January 20, 2018 at 5:50 AM:

    “I have re-read it. The principle is the same. If the original pensions came from the Consolidated Fund, there was a cost; if responsibility then is transferred to a statutory body, that cost is transferred.

    The estimated cost of the transfer is then calculated actuarially. It helps to forget the terms Consolidated Fund and statutory organisations. Think that the cost is being transferred from one pension provider to another.
    The calculation is then based on the actuarial metrics.”

    We have been under the ‘mistaken’ impression that the funding of all public sector pensions was a call, either in the first or final analysis, on the Consolidated Fund.
    Where would continuously unprofitable permanently cash-strapped State-operated agencies find the cash flow to provide for pensions other than as transfers from Central Government via the Treasury?

    Like

  • millertheanunnaki

    @ Enuff January 20, 2018 at 11:56 AM

    It sounds as if elections are in the air with a similar date to that in 2013.

    Unless the MoF has transmogrified from a pure-bred liar to a financial Houdini of finalizing budgets within a shortened’ time period we cannot see how he can present the mandatory Estimates and have them approved before Parliament comes to its Constitutionally-natural death at the end of the first week of March 2018.

    Clearly, the Estimates for the financial year 2018-2019 must reflect the fiscal adjustments necessary to execute his long overdue recovery plan and to meet IMF expectations.
    These fiscally austere projections certainly cannot be ‘rushed through either at the preparatory or debating level within the short period of the closing window available in the current Parliamentary session.

    Like

  • @Blogmaster
    you know the line seen in shops….”in God we trust, all others kindly pay in cash”. HIS satisfaction is HIS business, and it should not be ‘in lieu of’.
    How does one explain a body like the National Petroleum Corp of B’dos (a misnomer) which files annual reports from 03-08, and then STOPS http://www.npc.bb/corporate-profile-2/
    The NPC is D.Boyce not the MoF. The condition is endemic. Rampant.
    Caves of Barbados, interesting because Dr JR’s chart shows them getting money in the last 2 years of his spreadsheet….the last report? 2009. and filed in 2015, and they LOST money in both 08 & 09 https://www.barbadosparliament.com/uploads/sittings/attachments/e077abd31a31b901327863b23e6cf6dd.pdf

    Like

  • @Northern Observer

    Agree, it is endemic read straddling both political parties.

    Like

  • NorthernObserver January 20, 2018 at 2:51 PM #

    Caves of Barbados, interesting because Dr JR’s chart shows them getting money in the last 2 years of his spreadsheet….the last report? 2009. and filed in 2015…(Quote)

    I say again, the Barbados public sector is riddled with gross incompetence, not political corruption. Why were questions not asked in parliament? Why did our media not raise these questions? Have any of the managers responsible for the delay been promoted during that time? How about the responsible ministers?
    Again I must go back to the NIS, which is late with its triennial actuarial report. Why is the CEO still in a job? Why is the chairman still in a job? Why is the minister still in a job? Why is this not major news story?

    Like

  • This is the most recent report from Accountant General. I went to sleep twice and hadn’t reached page 25 yet. But it has in lots of interesting reading
    https://www.barbadosparliament.com/uploads/sittings/attachments/0cfdd6c83ccb12c03abc477ba295c2a7.pdf

    Like

  • Just to let you know. Greece is now hanging the 8th year in the talons of IMF. Greece will never ever recover UNTIL the country leaves the Euro zone and devalues. All talk that Greece will return to the capital market this year is nonsense. They are not able to issue billions of long-term bonds, but only foolish T-bills.

    The same lesson applies to Barbados. The 2:1 peg is de facto a membership in a USD zone. Barbados must leave it and devalue the local dollar to a grade where the very bad work ethic and the rotten attitude of the many lazy laggards in the ministries, courts and admins equal the value of the currency.

    Just ask yourself how many hours a US worker needs to finish a task and how many months or even ages it takes in Barbados. Or just look at the backlog at the Supreme Court which seems to be a national distinction or something like that.

    Liked by 1 person

  • millertheanunnaki

    @ Tron January 20, 2018 at 8:48 PM
    “The same lesson applies to Barbados. The 2:1 peg is de facto a membership in a USD zone. Barbados must leave it and devalue the local dollar to a grade where the very bad work ethic and the rotten attitude of the many lazy laggards in the ministries, courts and admins equal the value of the currency.”

    In just a few more months Bajans will have to face the music and sit that inevitable test to show how they will be able to swim the long distance back to the shores of economic survival or sink to the bottom of the pile of failed statehood.

    At least they can rely on their once derided Caricom brothers and sisters in Jamaica and Guyana to help them to practise on past test papers.

    Like

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