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Responses to questions from BPTT Retirees Group – August 17,2013.

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Presentation on theme: "Responses to questions from BPTT Retirees Group – August 17,2013."— Presentation transcript:

1 Responses to questions from BPTT Retirees Group – August 17,2013

2 Question 1. Could the plan be periodically adjusted to the Cost of Living index? Response: Currently, there is no provision in the Plan’s Rules for a guaranteed increase to pension payments. Any increase is therefore (e.g. as part of the 2002 benefit improvement)is granted at the Company’s discretion and subject to the consent of the Trustee. This increase mainly depends on whether there is enough funding for a pension increase.

3 Responses to questions from BPTT Retirees Group – August 17,2013 Question 2. When last was the pension Plan audited? Response: The last audit was as at December 2012 by PricewaterhouseCoopers and submitted to the Inspector of Financial Institutions in accordance with the provisions of The insurance Act, 1980.

4 Responses to questions from BPTT Retirees Group – August 17,2013 Actuarial Valuation:- Is an exercise where the Actuary assesses the plan’s financial position. The value of the plan’s assets is compared with the liabilities. The amount of contributions that needs to be paid to target the promised pension benefits is then determined. Valuations are required by law in Trinidad and Tobago every three (3) years. The valuation results are reliant on certain assumptions regarding the future.

5 Responses to questions from BPTT Retirees Group – August 17,2013 Question 3. What is the current financial status of the Pension Plan; balanced, overfunded or underfunded? Response: As per the last Actuarial Valuation as at December 2011, the plan is in deficit. It was agreed to increase the company’s contribution from 13.4% to 17.4% to clear the deficit over a ten (10) year period (i.e. by the end 2021). The outlook of the local economy is uncertain and investment opportunities for pension plans remain limited.

6 Responses to questions from BPTT Retirees Group – August 17,2013 Question 4. Could a retiree sit on the Pension Plan Management Committee? Response: As per the plan rules, the Pension Plan Management Committee is made up of active members only.

7 Responses to questions from BPTT Retirees Group – August 17,2013 Question 5. What options are available to increase the value of pension to retirees? Response: This is an issue that the company can consider but as the Plan is currently in deficit any increase to pensions would have to be funded by additional contributions from the Company. Currently the company is paying extra contributions to secure the existing benefits so there are no extra funds for an additional discretionary pension increase.

8 Responses to questions from BPTT Retirees Group – August 17,2013 Question 6. Upon the death of a retiree, what portion of the pension does the Spouse collect? What is the Spouse’s entitlement? Response: Under the Plan’s Rules, the nominated beneficiary is entitled to pension payments for the balance of the pensioner’s guarantee period. For example if the pensioner passes away three years after starting to receive pension, the beneficiary will be guaranteed another 7 years of payment.

9 Responses to questions from BPTT Retirees Group – August 17,2013 Death of a Deferred Pensioner: According to the Plan’s Rules the beneficiary is entitled to a refund of the Deferred Pensioner’s ordinary contributions with interest thereon plus the accumulated value of any additional voluntary contributions. In addition, in anticipation of formal approval of the changes to the Plan’s provisions from 1 October 2002, the beneficiary will also be entitled to a spouse’s pension equal to 50% of the Deferred Pension. This pension is payable from the first day following the month in which death occurs

10 Responses to questions from BPTT Retirees Group – August 17,2013 Question 7. There is an issue of a quadriplegic’s inability to access his pension, in spite of his disability, because he is not of pensionable age and was employed with Repsol as a result of a business transaction carried out by bpTT. How can this be avoided? Response: At the time of the incident he was an Active employee of another organisation and a Deferred pensioner of bpTT, therefore his current employer is his primary provider and bpTT secondary as per our Plan rules. I will recommend a review of the case under special circumstance.

11 Responses to questions from BPTT Retirees Group – August 17,2013 Question 8. Can you provide a status update on these requests? The following is an extract from a correspondence from a retiree Since 2006 a few retirees have written, on behalf of all the retirees, to Mr. Robert Riley and Mr. Christie appealing to them to look into this matter concerning medical and pensions and so far nothing has transpired. Mr. Riley did reply to us on June 20, 2006 and said that "pension plans have to be managed prudently and carefully to ensure that both retirees and future beneficiaries are provided for. While we do not guarantee increases in pension payments we do undertake actuarial assessments which include reviewing pension levels and costs." He went on to say "that next such review will be carried out on the actuary's valuation of the Plan as 31 December 2005, the results of which are expected in the second half of 2006. At that time we will be in a better position to determine whether a pension increase can be granted." We again wrote to BPTT, this time to Mr. Christie in November of 2011 and again in December 2012 in this connection.

12 Responses to questions from BPTT Retirees Group – August 17,2013 Response to Question 8: Currently the company is paying extra contributions to secure the Plan existing benefits. Granting an additional discretionary pension increase now would lead to a strain on the Plan’s assets and the Plan’s ability to meet its pension obligations. The Company has therefore decided not to increase pension payments at this time. However, we recognise that inflation remains a significant concern for all of the Plan’s members and particularly pensioners. We will therefore maintain our commitment to review the level of pensions on a regular basis. The next such review will be carried out as part of the actuary’s valuation of the Plan as at 31 December 2014, the results of which are expected in 2015.

13 Responses to questions from BPTT Retirees Group – August 17,2013 Question 9. Could optical and dental care be included in retirees Medical Plan? Response: Yes, it is possible but it will be subject to an increase in premiums. Currently the Claims Loss Ratio is 202% it should be 75% Question 10. The returns to the insured are minimal with regards to the current cost of health care, what can be done to make the plan friendlier to the user? Response: Same as above

14 Responses to questions from BPTT Retirees Group – August 17,2013 Question 11. Is there an age limit to the plan, or is it until death? Response: There is no age limit to the plan. Question 12. What are the criteria for access to the medical plan? Some retirees were not made aware of the medical plan on retirement, what provisions could be put in place to get these people insured? Response: Once you retire from bpTT you can access the retirees medical plan immediately. If one month passes from your date of retirement and you haven’t joined the plan you have to complete a medical (at your cost) which will be submitted for approval by the insurance underwriter.

15 Responses to questions from BPTT Retirees Group – August 17,2013 Question 13. What is the spouse’s entitlement to the medical plan after the retiree passes on? Response: Under the current terms of the contract there is a provision for a “Survivor Benefit”, equal to one year of coverage to the surviving spouse subject to five years of employment i.e. the employee must have worked with the company for five years or more for the spouse to receive this benefit Question 14. What is the possibility of an established recognized and bpTT supported Retiree Programme? On retiring from bpTT, we have no voice, no contact at bpTT, no opportunity to have issues heard or addressed. Response: Keep this existing forum going and we can meet with the leader or representative once per quarter. We can also agree to attend meetings from time to time to provide context and information.

16 Responses to questions from BPTT Retirees Group – August 17,2013 Question 15. Would inclusion of retirees in company’s medical plan – making it contributory, if required, be considered? Response: The company’s medical plan is for active employees only. Question 16. Extract from a retiree “When I took the package (2008) I had an exit interview with Robert Riley. In that conversation he indicated that the Medical plan was under review and that an upgrade of the plan was coming and changes will apply to the retired employees. What happened? Why did we get left out?” Response: The medical plan was reviewed and there was little to no room for additional benefits without significant cost implications.

17 Responses to questions from BPTT Retirees Group – August 17,2013 Question 17. If BPTT has no intention of extending the current employees plan to the retirees, can the company negotiate a supplemental group rate for retirees, which would provide better coverage? Response: This was previously covered in the presentation. Question 18. Extract from a retirees note states “Previous letters to management (the most recent being late 2012) request in summary, the company’s positive consideration as follows: Increase in retirees’ pension Include cost of living factor into above Inclusion of retirees in company’s medical plan – making it contributory, if required.“ Response: This was previously covered in the presentation.

18 Responses to questions from BPTT Retirees Group – August 17,2013 Question 19. The coverage for annual medical for retirees and their spouse is not clearly spelt out. Sometime a percentage ($1,000 out of a $1,900 bill) is paid by the insurance and other times only $ 200.00 is paid. This needs to be regularized. Response: If this is referring to Preventative Care it is clearly stated as follows; Medical Examination $200.00 Pap Smear$50.00 Mammogram$200.00 Prostate Test (PSA)$100.00 Annual Glaucoma Test $50.00

19 Thank You and Questions.


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