posted 17 Oct 2018, 06:33 by Gerry Kangalee   [ updated 17 Oct 2018, 07:02 ]
Pension plans are governed by a number of bits and pieces of legislation and practices. The Ministry of Finance which has the authority for the approval of all pension plans utilizes Draft Regulations from the Finance Act of 1969. These Regulations were never proclaimed.

All plans are required to include numbers 13-15 of the said Regulations in the wind-up provisions of their respective Rules and Trust Deeds. This is of primary concern to Defined Benefit Plans as opposed to Defined Contribution Plans, due to the fact that most of the funds of the latter are contained in individual accounts of the plan membership.

These points list three steps to be followed in the event of the wind-up of a plan:

1) Secure all pensions in payment at existing levels or in proportion, if the remaining funds are insufficient.

2) Secure pensions, either immediate or deferred, for all remaining members or in proportion if the remaining funds are insufficient.

3) In the event that there are still unapplied funds, they are to be used to increase benefits payable to the aforementioned groups.

Most pension plans entrust these responsibilities exclusively to the Trustees and mandate that the listed benefits be secured via the purchase of immediate or deferred annuities. The passage of time, the phenomenal success of pension funds, the improvement in financial awareness and knowledge of workers etc. have exposed the serious deficiencies of these provisions.

Occupational Pension Plans’ assets exceed TT$60 Billion and represent one of the major sources of long term financing and is a pivotal player in our country’s capital markets. It is one of the unheralded successes of workers and their trade unions in having the foresight and discipline to defer part of their wages for well over half of a century. It is for this reason that it is imperative that members must take a keen interest in the affairs of their pension funds.


During the life of a plan, once there is a corporate entity as Trustee, all plans are required to have a joint management committee. In most plans the Chairman and Secretary are drawn from the Plan’s Sponsor’s (Company) representatives. This means that whenever the Company ceases to exist (liquidation) or is unwilling or unable to continue as Plan Sponsor then there can certainly be no Company Representatives. The management committee, itself, that was elected and appointed in accordance with the rules of an on-going pension plan, ceases to exist.

The Trustees then take control of the plan and together with their appointed Actuaries, Auditors, Valuators, Lawyers etc they make all the decisions and are paid first out of the funds under management. This was the case with the Arcelor Mittal pension plan when that company folded. It was only because of the struggles of the members and their union that the members got any voice in the proceedings. This is utterly unacceptable.

The pension funds are the property of the members at all material times. The fact that the company ceases to exist does not negate this. Pension funds are held in trust by the Trustees, but the ownership and control by the members (owners) must never be lost.

During the normal operations of pension plans, the joint management committee directs the Trustees and the Trustees advise the management committee. This relationship has worked well for decades. It is, therefore, critical that all plans must move with haste to amend their rules to have ALL members meet in the event that a wind up is to be triggered and have them elect a wind-up management committee with similar powers and rules that had previously existed. This is further accentuated when the process of securing of benefits and other wind up activities are examined.


Most plans, in the process of winding up, prescribe that benefits be secured via the purchase of annuities. There are many critical issues which arise from this.

1) It is difficult for most insurance companies to individually absorb the business activities of the larger pension plans. Indeed, some plans’ balance sheets exceed that of the insurance companies.

2) The T&T capital market provides very limited trading opportunities and there are very few investments that are considered desirable. Therefore, different portfolios tend to have noticeable similarities as traders by and large keep the better options. This can then give rise to concentration and other undesirable risks.

3) Each insurance company will have its own view on its risk appetite, expectations on rates of return etc. They will also have different administrative costs and profit margins. These issues result almost always in the discontinuance costs of a pension plan being much higher than its ongoing costs. Therefore, a plan that is in surplus, if it were to continue as an on-going entity, could have a serious deficit if it were to be wound up. This is the case of the Petrotrin Employees pension plan if the annuities option were to be pursued.

4) If the pension plan’s assets were to be sold between two or more insurance companies who all have different rates, these different rates cannot be applied to the same assets of a single plan resulting in two members in similar circumstances receiving different benefits.Trying to resolve these myriad issues takes decades sometimes and it is the members who suffer while these deliberations are ongoing. While all this is going on, administrative and professional fees continue to be paid and there is no oversight by the owners of the fund.

Members of pension plans, whether unionised or not, should ensure that the wind up provisions recommended here (see below) are included in their trust deeds and rules so that in the event of a wind up they would still have control over the operation of their plans and not cede that control to trustees, whose interests may not coincide with that of the members.


i) The Plan shall terminate upon the giving of six (6) months’ notice in writing of such termination by the Company to the Trustees, Management Committee and to the Members.

(ii) If the Company shall be wound up for the purpose of reconstruction or amalgamation with any other company the Trustees may with the approval of the Management Committee, make such arrangement as they shall in their discretion think fit for the continuance of the Plan in conjunction with such reconstructed or amalgamated company as if such last mentioned company were the Company and the Trust Deed and Rules shall thereafter take effect in all respects as if such company had been a party to the Trust Deed instead of the Company.

iii) If the Company shall for any cause whatever cease to carry on business (unless it be wound up voluntarily for the purposes of reconstruction and the new company elects to take the place of the Company for all purposes of the Plan) or if the Plan shall be terminated the Company and/or Management Committee shall take immediate steps to convene a meeting of the all members of the plan to appoint a Wind-up Management Committee. 

This Wind up Management Committee will come into effect co-incident with the cessation of operations of the Company. It shall comprise of the same number of persons as the outgoing Management Committee and shall enjoy similar rights, privileges and powers as the outgoing Management Committee. The Wind up Management Committee shall at its first meeting elect its Chairman and Secretary. All documents, records, minutes etc. of the outgoing Management shall be passed over to the Wind up Management Committee. Members of the former Management Committee will be eligible to be elected.

iv) The Trustees with the advice and assistance of an Actuary and Wind up Management Committee shall prepare and adopt a plan of distribution among the Members which shall reflect the actuarial equivalent of all benefits accrued to each Member to the time of distribution. 

Such plan of distribution shall be in accordance with the Rules and shall be final and binding on all parties and every Member shall accept the amount either in the form of an annuity or in any other approved financial instrument which satisfies this purpose and paid or secured to him in full discharge of all claims in respect of the Fund and shall have no further claim whatsoever in respect of any rights to any retirement benefits under the Plan.

(v) expenses and fees incurred by the Trustees and the Management Committee in the administration of the Plan including the winding-up thereof shall be reimbursed out of the Fund.
The recommended provisions were developed by the National Workers Union, after extensive discussions with a number of trade unionists from across the trade u


01) There shall be established a Management Committee consisting of six Representatives and six Alternates of whom three Representatives and their Alternates shall be appointed by the Company and three Representatives and their

Alternates shall be appointed by Members. The Member’s Representatives and their Alternates shall be appointed either by secret ballot or by a simple majority on a show of hands at a meeting of Members which shall be convened by the Secretary. No person shall be eligible for appointment to the Management Committee unless he is a Director of the Company or a Member of the Plan. The Company shall appoint its Representatives by communicating to the Secretary in writing about its appointment(s).

02) The Alternate of a Representative shall exercise all the rights and privileges of such Representative in the event of the latter’s inability to attend any meeting of the Management Committee.

03) The Chairman of the Management Committee, or in his absence, the Chairman of any meeting of the Management Committee shall be elected from amongst and by the Members’ Representatives or their Alternates. In the event of a deadlock in voting he shall also exercise a casting vote.

04) (a) The Secretary of the Management Committee shall be appointed by the Company, and he shall record and maintain minutes of all meetings of the Management Committee, conduct all correspondence and perform all duties incidental to the administration of the Plan, including the convening of all necessary meetings of the Management Committee and the Members. All correspondence pertaining to the Plan must be made available to all members of the Management Committee The Secretary shall convene a meeting of the Management Committee upon request of the Chairman or of any three Representatives or their Alternates.

(b) Members’ Representatives of the Management Committee and their Alternates shall serve for a period of two years, and shall retire at the end of two years, but shall be eligible for re-election. In the year that the Members’ Representatives and their Alternates are due to retire, the Management Committee shall fix a date on or before which the vacancies arising from such retirement shall be filled. Provided that until a new Management Committee is constituted as provided by this Rule, the former Management Committee shall remain in office and carry on the duties of the Committee.

(c) Any Representative or Alternate may resign from the Management Committee upon giving 30 days’ written notice at any time to the Secretary of the Management Committee.

(d) The Company may at any time remove from the Management Committee any Representative and/or/Alternate appointed by the Company by notice in writing to the Management Committee and to such Representative and/or/Alternate.

(e) The Secretary shall at the request in writing of ten percent of the Members call a meeting of the Members within ten days of the receipt of such a request for the purpose of removing from and/or appointing to the Management Committee a Representative and/or his Alternate selected by the Members, provided that the Secretary may whenever necessary, call such meeting without such request. Ten days’ notice of such meeting shall be given to the Members and at such meeting the Members or Member present shall form a quorum and a simple majority of those present and voting shall decide the matter for which the meeting was called.

(f) If any vacancy shall arise amongst the members of the Management Committee, the same shall be filled by the Company or the Members within three months after such vacancy occurred. The Management Committee shall be at liberty to act notwithstanding the existence of a vacancy or vacancies for the time being in their body, but shall not, except for the purpose of filling a vacancy under this Rule, act if there is no quorum. Any Members’ Representative appointed to fill a vacancy shall retire at the date when the Representative whom he replaces would have retired.

(g) The Management Committee shall meet together for the dispatch of business and may adjourn or otherwise regulate its proceedings in any manner it may think fit, but all meetings shall be held at such place as the Management Committee may direct. Questions arising at a meeting shall be decided by a majority of votes on a show of hands, the Chairman shall have both an original vote and a casting vote.

(h) Four Representatives present personally or by Alternates of whom two Representatives or their Alternates shall have been appointed by the Company and two shall be Members’ Representatives or their Alternates shall be quorum at a meeting of the Management Committee and such quorum shall have the power to act notwithstanding a vacancy among the members of the Management Committee. If the Representatives or their Alternates after being duly summoned to a meeting of the Management Committee absent themselves, and upon being summoned to a second meeting thereof further absent themselves, the second meeting may proceed with two members or Alternates of the Management Committee then presentproviding that one is a Members’ Representative and the other a Company’sRepresentative. The Management Committee so constituted shall have the power to act notwithstanding the absence of the other Representatives or their Alternates.

05) All matters, discretions or questions arising out of or under the provisions of the Trust Deed or the Plan Rules, and all discretions exercisable thereunder and generally all other business affecting the Plan shall be dealt with by the Management Committee who shall have the power to make such representations or suggestions or direct the Trustees appointed by the company as they consider expedient. All such decisions, suggestions, representations, consents and other matters and things dealt with by the Management Committee shall forthwith be communicated to the Trustees in writing signed by two members of the Management Committee, one of whom shall be a Company Representative, and the other a Members Representative, and whenever required shall be in such form as the Trustees may determine.

06) Subject to the provisions of the Plan, the Management Committee, from time to time, may establish rules for the administration of the Plan and the transaction of its business. The decision of the Management Committee on any question involving the general administration, interpretation and application of the Plan shall be conclusive. Any discretionary actions to be taken under this Plan by the Management Committee shall be uniform in their nature and applicable to all persons similarly situated.

07) The Management Committee shall keep or cause to be kept in a convenient form such data as may be necessary for valuations, Actuarial Reports, Accounting Statements etc. with respect to the operation and administration of the Plan. The Management Committee shall submit or cause to be submitted annually to the Trustees a report showing in reasonable summary the financial condition of the Plan, including a brief account of the operations of the Plan for the past year and any further information which the Trustees may require.

08) All appointments, removal from office and requests shall be in writing to the Secretary of the Management Committee.

09) The Management Committee and the Trustees and the company and its Officers shall be entitled to rely upon tables, valuations, certificates and reports furnished by such actuaries, lawyers, agents, clerical, medical and accounting services, and the Management Committee and the Trustees, and the Company and its Officers shall be fully protected in respect of any action taken or suffered by them in good faith and all actions so taken or suffered shall be conclusive upon each of them and upon all persons entitled to benefits under the Plan.

10) The provisions of this Section shall so far as they relate to the establishment of the power and duties of the Management Committee apply only if at any time and from time to time a trust corporation is sole Trustee.

11) At least once per year but upon receipt of the annual Audited Financial figures and the Actuarial Report, the Secretary shall convene a meeting of all Members of the plan. At this meeting these Report(s) shall be presented and discussed.
nion movement.