$200M TEXTEL pension issue heads for Privy Council

It is billed as a Battle Royale between former employees of TEXTEL and TSTT. The fight is over the surplus in the TEXTEL pension plan which ceased when the employees of TEXTEL joined the TSTT pension plan.

After all these years, no one has been able to access any funds from the TEXTEL plan; it was remained with the trustee RBTT, and it has grown considerably, which, according to retired TEXTEL Personnel Manager Eugene Lopez, must be in the vicinity of $200 million. The former employees tested the matter in the TT courts and lost. Now, they are heading to the Privy Council which they hope will resolve the matter. TEXTEL was formed in 1970 following a joint venture between the TT Government and Cable and Wireless. But TEXTEL ceased to exist on December 31, 1990 when the new entity became TSTT. But the TEXTEL pension plan continued under TSTT, until the new company established its own in 1994 when it invited members of the TEXTEL plan to join theirs.

Effective January 1, 1995, all former TEXTEL employees joined the TSTT plan, which according to Lopez, had enhanced benefits over the previous plan. As of December 31, 1993, there was $62.9 million which represented the surplus in the TEXTEL plan. The former employees were ready to share the spoils. That is when the problems started. Lopez said TSTT wanted 56 percent of the surplus. “We said no. We sought a meeting with TSTT and this negotiation went on from 1996 to 1998. I got my attorney to write to TSTT in 1998. I did get a reply from the company which amounted in reality that the matter could not be resolved and there was nothing more to discuss.” TSTT sought to transfer the surplus to its own plan on the advice of its actuaries Bacon, Woodrow and De Souza. Lopez objected to the proposal to transfer the surplus in the TEXTEL plan to the TSTT plan.

Lopez said that in 1999, a decision was taken that the matter should be resolved in the High Court. He asked the court to declare that the move was unlawful and impermissible. Justice Ivor Archie, presiding in the Port-of-Spain High Court, ruled against the former TEXTEL employees, in a judgment dated September 27, 2000. But it was also a loss for TSTT as the judge ruled that the company was barred from having access to the surplus from the TEXTEL pension plan. Justice Archie ruled that the conduct of TSTT in seeking to implement the proposal to transfer the surplus from the TEXTEL plan was improper and lacking in good faith. He also found that TSTT was attempting to capitalise the new TSTT plan and use the surplus in the TEXTEL plan to benefit current employees who had never been members of the TEXTEL plan. So the surplus in the TEXTEL plan could not be touched either by those who contributed to the plan, nor TSTT. The money remained in the hands of the trustee, RBTT. Following the judgement, TSTT requested on October 9, 2000 to seek an audience with the former TEXTEL employees in an effort to reach a settlement. “But what was to come was sheer madness. The company wanted to settle, but on what condition?” Lopez asked.

Lopez told Sunday Newsday that TSTT wanted the 56 percent share of the surplus which was their original offer. Plus, another two-thirds of the remaining 44 percent. “Sheer madness! We totally disagreed with that and so, we decided to appeal the ruling of the High Court.” But the Court of Appeal, comprising Chief Justice Sat Sharma, Justice Margot Warner, and Justice Rolston Nelson, upheld the judgment of the High Court in a judgment dated December 12, 2002, and so the former TEXTEL employees lost again. TSTT was also left in the quandary as the company still could not touch the money. Lopez said an actual evaluation of the surplus in the TEXTEL plan dated March 31, 2000, put the figure at $179 million. He believes the figure has gone past the $200 million mark, although as he put it, “no one knows for sure what the actual figure is.” But Lopez is not alone in this struggle. Lawrence Brown, a former President of the Communications Workers Union (CWU), who sat opposite to Lopez during previous struggles, is now on his side as they seek the get the surplus from the TEXTEL plan.

“The union is now fully part of this struggle,” Brown told Sunday Newsday. “It is no longer Lopez versus TSTT/RBTT. This is now a people’s matter and the union is part of the whole thing. This is a wake up call to all the unions throughout the country on the issue of pensions. A lot of people are very much in the dark about pension plans. This is not just a matter involving former TEXTEL employees. This is about challenging the status quo and to see how society is run.” Brown added. What about the 500 TEXTEL employees who were part of the plan. According to Lopez, “some have died, some have retired and there could be just about 100 employees still employed at TSTT. This is a sad story,” he added. What’s next? Lopez said a committee has been formed to take the matter further. One of the plans, according to the retired Personnel Manager, is to take the matter to the Judicial Committee of the Privy Council in London. How long that will take and what is the likelihood of success is anybody’s guess. But Lopez is hopeful that the Law Lords will resolve this matter and no one can touch the money which continues to grow while beneficiaries of the plan continue to die.