Two former employees of the Department of Tourism are suing Government for allegedly denying them their pension rights. Marshalle Smith and Veronica Funderberk had their pension plans terminated by Government without notification.

They spoke to The Royal Gazette about their shock and sadness over the situation, after years of dedicated service to the Government. Ms Smith, a Bermudian who is legally domiciled in the US, and Ms Funderberk, a US citizen, were members of a United States-based pension plan established by the department.

The plan was separate from the arrangements made for civil servants. It entitled them to an annual retirement pension at age 65 equal to 60 percent of their final average salary or the pension value at the time of termination, with no pension collection at age 65.

However, the plan was terminated without Ms Smith and Ms Funderberk being notified, and the assets moved from the United States to Bermuda.

When their employment ended with Government in September 2008, the women were sent lump sum payouts via cheques amounting to $282,088 for Ms Funderberk and $98,366 for Ms Smith. They rejected the payments, as they would have been liable to pay around 35 percent tax on them to the US Internal Revenue Service.

Ms Smith and Ms Funderberk were among several employees of the North American Tourism Offices made redundant during a department shake-up in September 2008.

Most of the staff were Bermudians who were not affected in the same way by the pension issue, because they are not liable to pay tax to the US Government. After two years of trying to get their pensions transferred to alternative US-based plans, Ms Smith and Ms Funderberk have now resorted to legal action.

Ms Smith, 49, who worked for the department's Florida office for 18 years, said: "I was shocked to find out that the Government had closed out my pension."

And she explained: "I gave the Government an option two years ago to roll it into a pension plan but the Government refused. Had they agreed, we wouldn't have this issue. I'm disappointed because I served my Country well for 18 years."

Ms Smith, who still lives in Florida, said she has had challenges finding alternative employment since she lost her job.

Ms Funderberk, who was based in the New York office, has experienced similar difficulties and is currently working part-time only. She said: "I'm totally frustrated. I was devastated when I found out there is no real pension plan and they wanted to give me a lump sum which I was going to lose 35 percent of. I worked for them for 23 years."

The pair filed a writ against the then Minister of Tourism Ewart Brown and Director of Tourism William Griffith on October 25.

They are represented by lawyers Delroy Duncan and Henry Tucker from the firm Trott and Duncan.

The women are seeking damages either through compensation in the amount of their US tax liabilities on their lump sum payouts, or through a court order that Government must reinstate their monies to a qualifying pension plan of their choice in the United States.

A court date has not been set.