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OBA rejects ‘raid on the future’

Government’s plan to freeze pension contributions to soften the blow of pay cuts for MPs and workers was rejected by the One Bermuda Alliance last night.

Leader Craig Cannonier dubbed the proposal “a raid on the future”, claiming it would take more than $60 million in contributions away from the Government workers’ pension fund this year.

However, OBA MPs and Senators have agreed to take a five percent salary cut, effective March 1, with the cash going to charity until Government has determined its course of action.

Premier Paula Cox had written to the Opposition inviting them to accept a 17.5 percent pay cut, offset by a freeze in pension contributions, which would mean their take-home pay would drop by five percent.

A similarly structured offer was previously made to the unions representing Government employees: an eight percent pay cut offset by forgiving the eight percent pension deduction.

But according to the OBA, this would cost the Government workers’ pension fund $30 million in worker contributions and $30 million in matching contributions from Government.

“The Government is proposing to break a promise to help workers build a safe and secure fund for their retirement. That promise should not be violated,” said Mr Cannonier in a statement.

“Although the Government has cleverly softened its eight percent pay cut proposal to union members by proposing to forgive their normal eight percent pension deduction, the net result will keep more than $60 million that is supposed to go to building pensions for Government employees.

“The Government will put it toward other Government spending. It’s simply more debt in another form.

“Failing to support the civil service pension fund for a year is a raid on the future and it’s not right. It will create a ‘deficiency’ that will more likely affect younger taxpayers.”

Mr Cannonier said Government workers pension funds are already underfunded and, by law, any deficit must be covered by the taxpayer.

He said: “A one-year pass on pension contributions will not alter the Government’s serious financial problems. It will only push the problem further down the road.

“Indeed, there is no reason to believe the same situation will not rear its head again next year.

“It is important to remember that these pay and pension cut proposals are being driven by significant shortfalls in the Premier’s impending budget. They have nothing at all to do with making things better for working families.

“What we are watching is a last-minute scramble for access to pension monies to make the Budget look better than it is and to hide the truth about the Government’s terrible financial situation. It is a very cynical exercise to buy time and to help the Government avoid any hard decisions in an election year.”

He reiterated that the OBA believes Cabinet Ministers should take a pay cut of ten percent, as opposed to the five percent cut in take-home pay suggested by the Premier.

“Cabinet Ministers are the Government. They are responsible for all its decisions and for overseeing the consequences of those decisions. It is imperative that they lead by example,” he said.

“Otherwise, the Government is asking workers to take more of a pay cut than its own Cabinet Ministers. No political party should ask people to do something that its leaders are not prepared to do themselves.

“Bermudians have to ask themselves whether they are willing to subsidise the Government’s scheme and let it off the hook, or force it to face up to the consequences of its actions.”

A Government spokesman replied last night: “The Government has outlined its proposal and still awaits a definitive position from the Opposition in writing.”

A Progressive Labour Party spokesman said: “The choice between the PLP and the OBA is clear. PLP MPs and Ministers are ready to take a 17.5 percent reduction in their total compensation. OBA MPs are only willing to take a five percent cut.

“Don’t believe the smoke and mirrors. No matter how much Craig Cannonier, Grant Gibbons and the rest of the OBA try to wiggle out of it, they still believe that members of the PLP should take a bigger cut in salaries than they are willing to take.

“Finally, the PLP has one question: How much of a reduction is the Opposition Leader ready to take? We find it very interesting that he would call on others to take more of a reduction than he is willing to take himself.”

OBA leader Craig Cannonier s

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Published February 13, 2012 at 7:00 am (Updated February 13, 2012 at 7:19 am)

OBA rejects ‘raid on the future’

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