Row over TEXTEL pensions moving to Privy Council

The men behind the fight to get back at least part of over TT $350m surplus supposedly owed to TEXTEL pensioners from TSTT have moved one step closer to carrying the matter to the Privy Council. Eugene Lopez, TEXTEL’S former Personnel Manager and Ralph Boissiere, former member of the Pension Plan, showed Sunday Newsday the affidavits which were being prepared against the respective parties, (TSTT and RBTT). The affidavits deal with a process known as “oppression action,” which is one legal step before officially going to the Privy Council. Lopez’s team is being represented by Dr Claude Denbow SC, while TSTT is represented by Martin Daly and Hamel-Smith and Company for RBTT. Lopez said: “We are taking this as far as we can carry it.” Their determination to fight all the way to Privy Council and the legal intricacies are not deterring former TEXTEL pensioners who are very riled up about the issue. A petition was sent to Prime Minister Patrick Manning about two weeks ago, appealing to him to address the situation and 500-plus workers armed themselves with placards and protested outside Whitehall, Port-of-Spain, calling for a resolution in the longstanding dispute with TSTT.

As Lopez and his team prepare to battle it to the Privy Council, the workers got together at the Holy Trinity Cathedral, Port-of-Spain, last week, praying for a speedy end to the dispute and what they feel is rightfully due to them. Lopez and Boissiere have accused TSTT of not following the rules with regard to the over $300 million surplus. According to Lopez, the TEXTEL Pension Plan was absorbed by TSTT when the Trinidad and Tobago External Telecommunications Company Limited (TEXTEL) became defunct. Lopez provided Sunday Newsday with a report about the TEXTEL Pension Fund Plan. In the report, the parties claimed there was “failure and/or refusal” by TSTT to operate the TEXTEL Penion Fund Plan in accordance with the Trust, Deed and Rules of that Plan. The report referred to the “improper procedure adopted by TSTT with the knowledge of the Trustee (RBTT Trust Limited) and Actuary (Bacon, Woodrow & De Souza) to accomplish a mission to wind up the said TEXTEL Pension Fund Plan informally so that TSTT could distribute the assets of the Plan contrary to the provisions of the Plan’s Trust Deed and Rules, thereby depriving eligible former members of their legitimate interest in the surplus as provided for under Rule 34.2C of the said Plan.” Approximately 500 members are still paying contributions to TSTT’s current plan but the surplus, which was available during TEXTEL’s existence, is now part of TSTT’s assets.

According to Lopez, on January 1, 1991, TSTT inherited the TEXTEL Plan with a surplus of approximately $43 million. TSTT did not yet have a pension plan of its own, said Lopez. By virtue of a deed poll, TSTT operated the TEXTEL Plan until all the TEXTEL Plan members transferred their membership to the TSTT Plan with effect from November, 1995. “This would have brought the legitimacy of the members’ reps on the Management Committee of the TEXTEL Plan into question since they would no longer be members of the TEXTEL Plan and the Plan provides at Rule 32B that those reps,‘who must be members of the Plan’,”said Lopez. He disclosed that TSTT has been lobbying for “out of court” settlements and while he supports the idea, he does not agree with their terms and conditions. “We are not opposed to an out of court settlement but we did not want a settlement based purely on an exchange of numbers, for example, 70/30 percent, which is what they have been offering,” he said. The most recent offer was approximately 60 percent in TSTT’s favour and 40 percent in favour of the Company. Lopez said TSTT reminded them the Company is entitled to two thirds of the share, while they can be offered one third. However, he is calling for more equity in the distribution. As part of the settlement, Lopez and the Committe for Action, are considering allowing TSTT to accommodate all the people who had not yet joined the TSTT Plan, to have them transferred so there will be one less plan to deal with.

Lopez is calling on TSTT to tell the pensioners and the national community, the exact size of the surplus for the sake of transparency. Lopez claimed that when the new TSTT Pension Plan was initiated to take over the TEXTEL Pension Plan, there were about 500 workers already contributing to the Plan. “On January 1, 1995, all those people had transferred at the invitation of TSTT from the TEXTEL Plan to TSTT. That left no bodies and souls, no human beings as members in the TEXTEL Plan,” he explained. Lopez called it the creation of an “empty shell,” saying what remained in the Plan was a “substantial surplus.” “TSTT is saying since all the people have left the TEXTEL Plan and come into the TSTT Plan there is nobody to claim the surplus of approximately $300 milllion which remained,” he said. Lopez said the majority of the members of the Plan want RBTT removed as a Trustee. One of the reasons for this he said is because the Plan is supposed to be administered in accordance with its regulations and provisions. Under section 34 of the Plan, there was supposed to have been a management committee. “There has not been a management committee in place that was properly constituted since August 1999,” he said. “Moreover, the members feel that they should not have to ask for information, when under Section 37 of the rules of the Plan, they are entitled to get certain information pertaining to the Plan,” he said. Lopez felt that with the absence of a functioning “management committee,” a lot of the responsibilities from the Plan could not be carried out. “It has become physically impossible so that if the Company and the Trustee being the two parties are continuing to uphold that, they are oppressing those who are expecting differently from the Trustee,” he said.

RBTT responds to TEXTEL

RBTT, in response to the TEXTEL Penion Plan issue, published a statement in the newspapers on Sunday September 21. A senior official said the Company did not wish to make any further comments since the matter was still before the courts. In the statement, the Company said that RBTT Trust Limited, formerly Royal Bank Trust Company (Trinidad) Limited, is the Trustee of the TEXTEL Pension Plan established by Trust Deed and Rules dated February 3, 1981. In High Court Action No 3572 of 1999, Eugene Lopez instituted an action against Telecommunications Services of Trinidad and Tobago Limited and Royal Bank Trust Company (Trinidad) Limited in relation to the TEXTEL Pension Plan. RBTT said Lopez sought to obtain an order that the TEXTEL Plan was terminated and that in consequence the assets of the Plan should be distributed among the members, pensioners and deferred pensioners.

The High Court ruled that the TEXTEL Pension Plan was not terminated. By Notice of Appeal filed on October 23, Lopez appealed against the decision of the High Court. The Court of Appeal upheld the decision of the High Court and dismissed the Appeal on December 12, 2002. Lopez then applied for and was granted conditional leave to the Privy Council.
As Trustee, RBTT Trust Limited said it has acted in accordance with —
(a)The terms of the Trust Deed,
(b)Judgements and rulings of the Court in relation to this particular Trust Deed and
(c)The laws governing the powers and duties of the Trustees.
Accordingly, RBTT Trust Limited said it is in no position therefore, to influence the disposition of the surplus in the TEXTEL Plan and will continue to act in accordance with the rulings of the Court.

TSTT responds to TEXTEL

In a media release published in Newsday, September 21, the Telecommunications Services of TT said following the merger of TEXTEL and TELCO in 1991 and the formation of TSTT, TSTT established the TSTT Pension Plan with the objective that all employees of the company would become members of the TSTT Pension Plan. Under the TEXTEL Penion Plan, the employees contributed five percent of their salary and the Company contributed the equivalent of ten percent.  All active members, most pensioners and deferred pensioners under the TEXTEL Plan were transferred to the TSTT Plan. Thereafter, contributions to the TEXTEL Plan ceased. TSTT said on the advice of the Actuaries in accordance with the provisions of the TEXTEL Plan, the process was initiated for transferring assets from the TEXTEL Plan to the TSTT Plan, to meet the accrued benefits of the persons who had transferred to the TSTT Plan. TSTT claimed that Eugene Lopez, a pensioner under the TEXTEL Plan, who did not transfer to the TSTT Plan objected to the transfer of assets. In the statement, TSTT said Lopez had alleged that upon the cessation of contributions to the TEXTEL Plan on January 1, 1995, the TEXTEL Plan was effectively terminated in law and should have been wound up and the assets distributed among the members who remained in the Plan after January 1, 1995 in accordance with the rules.

TSTT said on his own behalf and on behalf of other members, pensioners and deferred pensioners, Lopez sued TSTT and the Trustees of the TEXTEL Plan, Royal Bank Trust Company(Trinidad) Limited. TSTT explained that this was done to prevent the transfer of assets and to obtain an order that the TEXTEL Plan was terminated and the assets be distributed among the members, pensioners and deferred pensioners.
Acording to TSTT, the High Court ruled as follows-
1. The TEXTEL Pension Plan was not terminated because the Trust Deed and Rules make specific provisions for the termination of the plan, and such provisions were not applied. Neither the absence of active members nor the cessation of contributions per se provides a sufficint reason for compulsory termination.
11.The transfer value could include a portion of the “surplus” notionally attributable to the members’ contributions plus a portion notionally attributable to the Company’s corresponding contribution. By Notice of Appeal filed on 23.10.2000, Eugene Lopez appealed against the decision of the High Court.
The Court of Appeal upheld the decision of the High Court and dismissed the appeal.
TSTT’s position is that it remains open to dialogue to arrive at an amicable resolution of this matter.