WORKERS PENSION COULD BE IN TROUBLE …. If Government Forces NIS to Give ‘Hair Cut” in Debt Restructuring

The Grenada Trade Union Council (GTUC) plans to tell the cash-strapped Keith Mitchell-led New National Party (NP) government to keep its hands off the National Insurance Scheme (NIS) in its efforts to get creditors to give the 15-month old administration “a hair cut” in debt relief.

Speaking to THE NEW TODAY newspaper on Monday night, one of the island’s leading trade unionist said that the local trade union movement is aware that the new rulers in St. George’s have signaled their intention to approach all creditors to accept a sizable hair cut to help Grenada address a difficult fiscal problem.

Within a month of taking office following the February 2013 general elections, Prime Minister and Minister of Finance Dr. Keith Mitchell announced that his government was in dire financial straits and decided to default on payments of the national debt estimated at EC$2.4 billion.

The TUC official said the movement is aware that government is taking advice from a foreign firm on handling the national debt and that part of the solution calls for all creditors to be approached to accept a “hair cut” in the region of 50% of the debt stock.

He stated that the NIS is a major creditor of the government as the State owes the scheme millions of dollars in the non-payment of the financial contributions deducted from public sector employees pay slip over a long period of time.

Both the former National Democratic Congress (NDC) administration of Tillman Thomas and the current Mitchell regime have been tardy in handing over to NIS monies taken by the Treasury from the monthly salaries of civil servants.

According to the official, the trade union movement has received information that “a general directive on the hair cut” has been brought to the attention of the NIS Management but nothing of the sort has been put before the Board of Directors of NIS about a “hair cut” for government in the region of 50% of the millions owed to the scheme.

He said the TUC is monitoring this situation closely and intends to instruct its member on the NIS board, Madonna Harford, the current President of GTUC, to strongly oppose any proposal that comes before the scheme for NIS to grant a “hair cut” to government.

He told this newspaper that the GTUC would have difficulty in selling such a proposal to the workers of the country since it is their life-time pensions that are tied up with the scheme.

“That’s a serious matter for us. It will affect all of us. It is not a few people but everybody who have to get a benefit from the funds (of NIS), he remarked.

“ I hope it is just an idea, a thought, nothing serious in the making. I don’t want to see anything like that before NIS. That will be a difficult one to sell”, he said.

The TUC official pointed out that any directive given to NIS to take a hair cut as part of government’s debt restructuring would amount to “a masking up of the place” and that the scheme can be left “crippled” if the workers pension are affected financially.

He also said that any move to force the scheme into accepting a hair-cut would have serious implications on the fund’s investments over the years in Bonds and Treasury Bills especially from the government itself.

He said the TUC is also fearful that if NIS is forced to give government “a hair cut” on the millions owed to the scheme then it is more than likely that other creditors would move in and demand that it threats them in a similar manner as the Mitchell administration.

“Government is not the only one that has debts but others too and they too will want a hair cut”, he quipped.

“ I hope that this does not over reach that stage. I don’t want to see anything like that on the cards at all. I hope it is just a thought and nothing serious in the making”, he said.
The TUC official pointed out that it would have been more prudent for the Mitchell government to look at implementing a Debt Service Levy to tackle the island’s debt woos instead of the current package of austerity measures.

The TUC is said to be divided along partisan political lines with the once powerful President-General of the Technical & Allied Workers Union (TAWU), Chester Humphrey now lining up behind the Mitchell administration after being expelled by Congress just over a year ago.

Humphrey and former Foreign Affairs Minister Peter David have been promoting an idea known as “Protect Grenada” in conjunction with Prime Minister Mitchell.

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