Pensions Under the Barbados Revenue Authority
Submitted by Frank Forde
Officers from the legacy agencies who opted to go over to the Barbados Revenue Authority (BRA) in 2014 are still waiting on a settlement of their pension benefits.
When the Barbados Revenue Authority was set up there were some decisions that impacted on some employees and which as a matter of urgency must be addressed. The matter concerns pension payable to former employees of the legacy agencies. There are divergent views on whether the employees of the legacy agencies were seconded from the public service to BRA for two years or were they employees of BRA, as the functions and their duties were taking over by the Barbados Revenue Authority (BRA) on the 1st April,2014. My analysis below will show that the officers of the legacy agencies who opted to go over to the Barbados Revenue Authority on the 1st April 2014 ceased to be covered under the Pensions Act, Cap 25, Public Service Act, Cap 29 and the Pensions Regulations, 1947.
If one looks at the situation which was faced by the Ministry of Finance, consultants and the project team from the BRA, it was the problems of staffing the Authority with the necessary skills to carry out the functions assigned to the Authority There were no other employees except those from the legacy agencies with the required training that were available to carry out such functions, so there was no other alternative but to take over the employees of the legacy agencies.
Prior to the Barbados Revenue Authority Act 2014-1 being proclaimed, personnel from the Ministry of Finance and the project team held a meeting in December 2014 with officers of the legacy agencies at the Lloyd Erskine Sandiford Conference Centre. In attendance were technocrats from the Ministry of Finance, PAD, Ministry of Civil Service and the project team from the Barbados Revenue Authority. This meeting informed the officers of the transitioning of the legacy agencies to the proposed Barbados Revenue Authority.
The following options were put to the officers in blunt terms:
- The transitioning officers were informed and warned that should they not opt to go to the Barbados Revenue Authority, they would be without a job and those who were not at the pensionable age would have to wait until the said age in order to qualify for pension benefits; The case re Campbell vs GOB at the CCJ was quoted.
- Officers who were 60 years and over would not be hired by the Authority;
- Officers who did not agree to work with the Authority would have to return to the public service or retire if there were no vacancies available;
- Officers would not be disadvantage in respect of their pension benefits;
- They pension rights would continue under the Authority.
A letter from the Barbados Revenue Authority, dated 10th March,2014 was issued to the Officers where an offer of a position with the Authority on a secondment, the effective date being 1st April,2014.
With the coming into force of the proclamation of the Barbados Revenue Authority Act 2014-1 on the 1st April, 2014, the officers of the affected legacy agencies had not informed the Public Service Commission of their intentions nor were they told the effects of the changes arising from the proclamation of the Act. At the 1st April 2014, officers who had not opted to go to the Barbados Revenue Authority (BRA) were locked out of the computer system. These officers in the legacy agencies sat in the offices until they received notification from PAD, either to be transferred to another department or placed on special leave. The other officers who opted continued to perform the functions that they were doing before the 1st April, 2014 until the 7th April, 2014 when they received a letter from the Personnel Administration Division that the Governor-General acting on the advice of the Public Service Commission had released them on secondment to the Barbados Revenue Authority for the period 2014-04-01 to 2016-03-31. The officers were concern about the secondment as this affected many of them who were acting in higher posts. As a result of the secondment, the affected officers were denied the benefits that were due to them under the Pensions Act, Cap. 25 and the Pensions Regulations,1947. Officers acting ceased on the 1st April 2014 when they transitioned to BRA as they were no longer acting in the public service.
In connection with the pension rights of officers whose rights by law must be preserved under the Pensions Act, Cap.25, Public Service Act, Cap. 29 and the Pensions Regulations,1947, I quote sections of the relevant laws to show the impact on the officers transitioned to the Barbados Revenue Authority. The Public Service Act- Part 1V, Appointment, Transfer, Promotions, Secondments, states at Section 21(1);
- “Section 21 (1) Where a person who holds an established office is seconded to service under another Government or under an authority, body or agency approved by the Governor-General for the purposes of this section, referred to as “an approved employer”, that person shall, during the period of the secondment, cease to receive the emoluments attached to that office but shall nevertheless, if the approved employer agrees to pay to the Government of Barbados a contribution in respect of his pension during the period of secondment at the rate prescribed by the Governor- General, be deemed to continue to hold that office for the purposes of the Pensions Act.” Under this Section, there are several conditions that were not satisfied; (a) There were no provisions in the Estimates of Revenue and Expenditure for the legacy agencies for the Financial years 2014-2016, therefore, there are no emoluments attached to those offices. (b) There were no contributions made by the Barbados Revenue Authority to the Government of Barbados in respect of officers’ pensions during the period of the secondment at the rate as prescribed by the Governor-General. (c) There is no rate nor emoluments to calculate the contributions, therefore, the officers cannot be deemed to hold those offices for the purposes of the Pensions Act. Furthermore, under Section 21(2)(a) and(b), the Governor-General cannot appoint persons to those offices as if they were vacant because there are no emoluments attached to them and (d) The Barbados Revenue Authority (BRA) was not an approved employer and this was confirmed by the Ministry of the Civil service.
- Part 1 – Preliminary 2 of the Public Service Act, Cap 29 states that “in this Act, secondment of a public officer” means the temporary transfer of that officer from a substantive office to another position or employment outside the public service at the request of the Government of Barbados or the entity to which the officer is transferred.” This shows that BRA is not an approved employer for the purposes of the Pensions Act, Cap.25 as the secondment is outside of the public service.
- Section 8(1) of the Pensions Act, Cap. 25 states that “Subject to subsections (2), (4) and (5) and section13A (2) no pension, gratuity or other allowances under this Act may be granted to an officer except on his retirement from the public service. One of the following cases which is relevant is the case at Section 8(1)(d) which states that on retirement “on the re-organisation of his office for any purpose.” This case states that an officer may be granted a pension where his office has been reorganised for any purpose.
- Section 5 of the Pensions Act, Cap.25 states at section 14 that “If an officer to whom a pension has been granted under this Act is appointed to another office in the public service, the payment of his pension may with his consent, be suspended during the period of his reemployment.” This section does not apply to public officers who were transitioned to BRA.
The following recommendations were made by the Ministry of Civil Service to the Ministry of Finance in 2016;
- “that the Barbados Revenue Authority (BRA) be declared an approved employer and the relevant contributions be made to the Treasury to preserve the pension rights of the seconded officers; and
- that the computation of pensions would assume that the service of the transitioning officers was continuous so that any combination of acting in the legacy agencies and the BRA would be included in the calculation. The BRA would pay the difference in the pension due.”
- “that the qualifying period for acting to be considered in the emoluments used in the computation of retiring benefits is not less than thirty-six (36) months within the last five (5) years, at the time of retirement.”
- “You are therefore directed to act accordingly.” No further action has been taken on this matter. This is usual in Barbados
This is an admission on the part of the Ministry of the Civil service that the Public Administration Department secondment of officers from the legacy agencies to the Barbados Revenue did not comply with the law.
The above analysis shows that officers from the legacy agencies who opted to go over to the Barbados Revenue Authority took effect from 1st April 2014. This resulted in a termination of their pension rights for the purposes of the Pensions Act, Cap. 25, Public Service Act, Cap. 29 and the Pensions Regulations,1947, consequently, officers transitioned to the Barbados Revenue Authority are entitled to their pension benefits under section 8. (1)(d) which sets out the circumstances in which a pension or gratuity may be granted. As stated before, one of the circumstances is “on the reorganisation of his office for any purpose.” The reorganisation of the office took effect on the 1st April, 2014 when the functions of the legacy agencies were transferred to the Barbados Revenue Authority. The calculation of the pension benefits should also include any benefits under section 19 (7) of the Pensions Regulations, 1947.