Ministers/MPs On Pay Cuts, OBA Reply
[Updated with OBA's counter offer & UBP response] Premier and Finance Minister Paula Cox said that Ministers and Government MPs are prepared to accept a one year cessation of pension contributions, as well as a 5% salary decrease.
This afternoon [Feb.9] the Premier wrote to Opposition Leader Craig Cannonier to ask if Opposition MPs would be willing to agree to a decrease in their salaries and a one year freeze in pension contributions.
The Premier’s letter referenced recent Union negotiations and said, “Government members in the Legislature are prepared to accept a similar arrangement which would for a period of one year involve a cessation of pension contributions together with a commensurate reduction in gross salary. Further to this, Ministers and Government members in the Legislature are prepared to accept an additional decrease in their salaries of 5%.”
The Premier said the two measures will see a reduction of 17.5% in Minister and Members salaries for this upcoming fiscal year, and asked Mr Cannonier if he “would indicate whether your members would be willing to join the Government members, and agree to a decrease in your salaries and a one year freeze in pension contributions.”
Update #1: The 17.5% total the Premier mentions was arrived at by adding the 5% cut in take home pay, and the 12.5% which is taken out for pension contributions. So a full time Minister – who makes approximately $168,000 a year – would lose 5% of their take home pay [$8,400 per year/$162 per week] and 12.5% [$21,500] added to their pension fund. MPs presently earn $56,022.94 per year, meaning the 5% decrease will reduce their take home pay by approximately $2,800 per year/$53 a week.
The letter from the Premier follows below:
Update #2: Opposition Leader Craig Cannonier responded, saying they will agree to a 5% cut for MPs and Senators plus a one-year suspension of pension contributions if Cabinet Ministers agree to a 10% pay cut and suspend their use of credit cards and expense accounts.
Mr Cannonier’s full statement follows below:
From Day 1 as a political party, we said we would cut ministerial salaries by at least 10%.
We restated that position in our Reply to the Throne Speech last November because of the need to “lead by example. We cannot expect Bermudians to tighten their belts without their leaders doing the same. Sacrifice must be shared.”
Shortly after, when questioned on this point, the Premier said a pay cut would be “an empty gesture.” That refusal was not acceptable then and it became more unacceptable as government cutbacks continued to pile up on the backs of working Bermudians.
The final straw, it appears, was last week when the Premier asked workers to take an 8% pay cut without offering any similar sacrifice by her colleagues.It was unacceptable then, and became moreso as the arrogance of such a one-sided request sank in. Indeed, the pay cut proposal may go down as the low-point in the history of the PLP in power – illustrating how much the distance had grown between workers and their government.
That being said, the move for a pay cut, no matter how late in the game, is fundamentally right for Bermuda in these tough times.
The One Bermuda Alliance supports a pay cut for ministers – because they are the people in charge of the government – from policy to operations. It is Cabinet Ministers who run the government, no one else. They are where the buck is supposed to stop.
We will agree to a 5% cut for MPs and Senators plus a one-year suspension of pension contributions if Cabinet Ministers:
- Agree to a 10% pay cut; and
- Suspend their use of credit cards and expense accounts – an area of personal spending that has been allowed to spiral out of control in recent years.
We have one final point to make clear: The Premier’s move to get workers to take a pay cut is a desperation move to get her government off the hook for what is shaping up to be the worst budget in Bermuda’s modern history.
The workers’ pay cut has nothing to do with making things better for people. It has everything to do with making her budget look better than it is.
Worker acceptance of the pay cut will allow the Premier to bury the hard reality of the Government’s extremely poor financial position and to postpone the consequences that she and her colleagues should confront as responsible people, as a matter of honour and self-respect.
Update #3: The Premier issued a statement saying the two UBP MPs have agreed to the proposal, her statement follows in full below.
I was pleased to receive a response to my letter from Kim Swan who indicated that he and Charlie Swan would agree to the proposed 17.5% reduction in salaries for Ministers and Members of the Legislature.
This is the type of behaviour that is befitting of those that are truly interested in benefiting the country. I will continue to work with those who put the country ahead of politics and I am grateful for MP Swan’s swift and statesmanlike response.
I am disappointed that rather than working together, the OBA and their Leader Craig Cannonier insist on playing politics with this issue.
Instead of responding to me directly, I only learnt of their position through the media. Nonetheless, we will move ahead and I look forward to bringing the resolution to Parliament to make this 17.5% reduction a reality.
On the day of the vote, I hope both opposition parties will do what is in the best interest of the county and support this reduction.
Good start…Should be for longer than a year though!
HMMMM… so The Craig Cannonier and the OBA are calling for a 5% cut in MP salaries and a 10% cut in Ministerial salaries. What pay cut does he believe that the Leader of the Opposition should take?
Good question, I wonder what he thinks his cut should be?
@ Cha
I think many of the posters are misunderstanding the Premier’s request.
For Public Officers (Civil servants, Police, Fire, Blue Collar workers etc) and Parliamentarians their pension contributions are matched by government. If the salary reduction is equal to the amount that they pay as pension contributions, there will not be a reduction in their take home pay. If the salary reduction is more than their pension contribution, there will be less take home pay.
Therefore, the Premier’s proposal will have no impact on the Civil Servants represented by the BIU and BPSU. The Parliamentary take home pay will be reduced by 5%. The impact on the Police Officers and any other special groups will depend on how much they contribute to their pension plan.
@Vote for Me…I understand it they tote it as a 17.5% reduction though in reality I know the weighted reduction is more like 3%. I think the OBA’s response is the right one though I would say that they should take a 17.5% strict pay cut and leave the pension alone. At the end of the day they are guaranteed their pensions so they are not actually giving anything up just further causing something that is underfunded to have even less money for future generations. Though as I have seen the picture that is the pension funds I know that in reality their will be payment issues much sooner (about 10 years).
I think Paula needs to wake the heck up and realize that the OBA were the ones that had suggested it and now she is trying to claim it like her idea. It is absolutely ridiculous from a premier who is back against a wall and cannot find a way out. She needs to make meaningful changes, and I will reiterate that them cutting into paying pensions will not affect them. They will still get the same pay out with or without the one year cut.
Also the reason that they want the credit card issue sorted is because though they may take a 5% cut in salary they can pay it back to themselves through the Government credit cards…Think about it Bermuda!
You have no evidence to back up your claims, none at all. However you’ll state that Ministers and Civil servants rack up credit card bills.
Is that all you can come back with?
Well… we’ve sorta been having difficulty over the years obtaining truthful numbers from the PLP/BIU Gov’t. You know, like visitor bed nights and such. The PLP/BIU Party is not exactly transparent; you must have noticed that. So, please tell us, VoR, where might we find all those Gov’t credit card charges? Bet they total hundreds of thousands of dollars, maybe millions! ALL unaccounted for.
@ Cha
It is interesting to note how we are ignoring the facts.
The proposal is for everyone (employees and Parliamentarians) to take a pension holiday – no deductions and no benefits. Thus no adverse impact on the pension fund assets. If the pay reduction is the same as the pension contribution (ie. employee offer), there is no reduction in net pay. If the pay reduction is more than the pension contribution (parliamentarians) then there will be less take home pay.
WTF – the opposition always have to go that extra untravelled mile. that’s why they are not fit to run. for craig to send the premiers letter to all the media is extremely unprofessional, but his own colleague says it best, he is a rookie with no experience and it shows up every time he opens his mouth. I would not want him to be premier of my kennel.
@reality is reality- Yes, you would rather continue to be a kool-aid drinker who will follow their pathetic, hopeless leader no matter how badly she f*cks the public over. Close your mouth idiot, you’re drooling.
You know not of what you speak. The Premier sent her letter to the media BEFORE it was received by the Opposition Leader, who was alerted to its existence by a call from Gary Moreno at ZBM.
Real classy, eh?
Come on Mr. Richards and OBA/UBP, you said you would be willing to accept a pay-cut….lets see if you will follow-thur, now that it is real….A real proposal on the table. All that talk, now lets walk the walk…
I’ll bet you that the OBA also agrees to a pay cut. If I win, you have to stop posting for a month and if I lose I’ll stop posting for a month? Deal?
I predict the OBA would fire back that the cut isn’t deep enough, Richards would request a cut of 25-33%
You are probably right. Politics can sometimes be so predictable.
About d*mn time too!! It’s about time that the Govt did something on this issue. Too bad they had to be dragged kicking and screaming to the table to finally do it though. If anything it shows how out of touch they are. Yawn!!
Am I missing something here? Didnt she ask the union workers to take an 8% cut? The governments idea of leading by example is to take a SMALLER cut even though they make much, much more. Dont many if not all have second jobs, private GP cars, expense accounts etc….. Don’t insult us by thinking we are weak or stupid. Like BOB said …you can fool some people sometimes, but you can’t fool all the people all te time!
UM.. they asked workers to take 8% and they are taking 17.5%.. What part exactly is it that you do NOT understand.
What I was made to understand was in fact theat yes, they asked the workers to take an 8% pay cut PLUS freezing pension contributions for one year which means that government did not have to match the workers contribution either. Yes? Im asking, not stating. If governmet isnt making the contribution then it would seem to me that their cut is in fact much greater that 8%? They seemed to have pointed this out and made it clear when speaking of their own proposed cut, but seem to have left it out when the put this proposal forward to the union workers.Again, Im not saying what Im saying is the gospel…Im asking if what Im made to uderstand is in fact incorrect. Are we comparing apples with apples?
I think part of the issue is that there were suggestions (not sure if they are true) that the government is on a defined benefit plan. That means no matter what you pay into the plan, you will always get out an amount based on your employment (years employed and salary). By not making contributions the government is essentially borrowing from the pension fund.
It is borrowing because the benefits will have to be paid in the future by the government. The potential problem with that strategy is that it could mean government is paying a higher rate of interest on this borrowing, the rate being the rate they need to earn to make the assets of the pension plan equal to how much they need to pay out in the future. If the pension was over funded this would be a great idea, if its underfunded (as has been suggested), not so much.
TL;DR – The government is potentially borrowing from the pension fund in order to cover today’s shortfall.
Just because 17.5% LOOKS higher than 8% don’t be fooled…Try UNDERSTANDING….do the math!!!!!
@ Justin
I guess we will not be hearing from you for a while… well sort of!
The OBA have agreed… well sort of!
The OBA are in a bit of a political pickle. They clearly have to agree to the reduction since it is Bermuda’s best interest. On the other hand, they have to ‘oppose’.
I look forward to the Parliamentary debate and ensuing vote. After all of the political drama, will they vote against the PLP measure and demonstrate that their call for reduced Parliamentary salaries was more style than substance??
@ Vote for Me: The OBA were the ones to ask for the reduction in the first place last year, and the Premier refused – in case you forgot. The OBA now are asking for an even deeper pay cut for Ministers that more reflects their pay scale, plus cutting out the perks which, as we saw with Dr. Brown, can really add up!
So the opposition who have more than once raised this issue in the past as a starting point are asked to “walk the walk”….. Was it not the ruling party that came to a meeting requesting cuts, knowing this was going to be a leading factor that the general publics have been asking for all this time, and showed up with NO answer.
Why this decision was not originally presented to the Unions as an incentive instead of waiting to see if the request from the public was still on the table. Looks to me the same attitude displayed earlier of not entertaining the pay-cut remained in the thoughts of the ruling party. Now their backs are up against the wall, the story has changed.
Bermuda, this is the time to ask for whatever your heart’s desire; to win an election, the PLP will agree to any-thing.
Special Girl – I agree that OBA have a chance to show their metal here. If they are smart they will propose 15% – 20% and continuation of contribution to pension. Let’s just see.
Music to my ears
What happened to it takes guts not to take a salary cut as paula cox said in last year’s good friday eve’s tv speech to bda
Well done PLP..
lets see what the OBA says. Over on their facebook page, they can’t agree, we’ll see what they say to this.
Well done smoke & mirrors. This is only a 5% pay cut. MP’s pension is based on their salary, NOT based on contributions so TAXPAYERS will have to make up the shortfall
That is not true.. But I understand your need to make it seem bad.
What you are saying is not correct As if you don’t pay in for XYZ years, you get LESS benefits!
Also, when MPs go to the house, they will have to pass a bill that states they reduce by 17.5% not 5%.. DOn’t get it twisted
@ Understanding: Actually I think you are wrong and Rocky Skink 2 is correct. MPs and Ministers pensions are tied to their salaries, so by not contributing for a year, there will be less in the pot to pay their pensions down the road. Also, if I understand it correctly, any shortfall in the pension money must be made up out of another fund – Consolidated Fund or Sinking Fund, one or the other – but either still means it comes out of taxpayer money.
Somebody who can quote the appropriate legislation please weigh in here and enlighten us all.
Members of the legislature are also taxpayers. Some people seem to forget that.
Incorrect. Their pay is derived from private sector taxpayers – all you are doing is repaying part of the tax you have taken. Legislaters may as well be paid Net. They do not generate taxable income.
Tell that to customs… As they walk out the side door…
I thought it was just me that noticed that! I bite my lip every time I get hassled at the airport by customs about if I declared everything as they usher friends, family and co-workers through the line and out the doors. I often wonder what the figures would look like if someone whecked the average duty per resident versus the average duty paid per customs officer. In my mind, it is taking of the public purse while some customs officers take the view that it is a job benefit.
I don’t know where you’re getting your FALSE information from, but Customs Officers PAY THEIR DUTY, just like everyone else. There is no law or procedure that says they can do otherwise.
Get your sh%t straight before you come on here making accusations
@ Pastor Syl
The proposal is for no contributions and no benefit. Therefore no one will pay for the 2012(13) financial year.
@ Vote for Me: So does that mean that when they retire, they will not draw a pension for the first year of retirement? Or will we, the taxpayers have to pay them again because there isn’t enough in the pension fund?
OBA, I am disappointed you agreed to the cut in pension contributions.
I believe Ministers and MPs have ‘fixed’ pension benefits. So the only loser is the taxpayer.
No, Understanding, you’re wrong. The 12.5% is no sacrifice at all to the individual ministers and MPs. They get the same final pension whether or not the pension contribution is made.
It’s a total sham.
So, yet again, Paula has managed to create more debt for the future. A bigger and bigger problem for our children to sort out.
@ Rick Rock
The final pension calcualtion is based on years of service. There will not be any credit for the 2012(13). Therefore the Parliamentarians’ pensions will be affected.
No they won’t.
Two thoughts here. First, this must have chapped Zane DeSilva’s a**. Second and more seriously, is it not grossly arrogant to issue this information in a letter challenging the opposition, instead of in some less childish manner. Anyway, they seem to have finally done something, or are they only “prepared to” do something?
That’s not a 17
That’s not a 17.5% pay cut, it’s a 5% cut and 12.5% less into the pension fund, which makes no difference at all to there pension. They are all on defined benifit! All this means is that the undefunded pension fund will be even worse off…. Take a real pay cut, 10% like some of that work for a living!
You are soooo right…
Absolutely right. It’s a 5% pay cut dressed up as something else. In fact, all it does is put off pension contributions until the future. They’re taking a ‘holiday’ from pension contributions when they can least afford to do it. Financially, this is an incredibly stupid move.
@ Rick Rock
There is a ‘holiday’ from contributions and benefits. Thus no financial impact on the Pension Funds.
There definitely is a financial impact on pension funds. There will be no contributions for a year. That will have a financial impact.
@ rick Rock
No contributiions and no benefit = no impact.
Please explain the financial impact of this proposal on the pension funds if you think I am incorrect.
@ Vote for Me
From my understanding, many government employees are on a defined benefit plan. The way that works is that you receive a % if your final salary each year in pension benefits until you die. The monies contributed by government and employees are put into a pension fund where the money is invested and paid out to current retirees.
This pension fund is invested on the actuarial assumption based on a number of factors including:
– Expected final salary
– # of years employees will be receiving benefits (i.e. time until they die)
– Return on plan assets… assumed to be 8% a year
Unfortunately, two of these three measures have been greatly misunderstood by the world at large. Due to health reform, people are living longer, and due to the current economic climate, it is no longer feasible to earn 8% a year in a safe manner.
By reducing pension contributions, all they are doing is reducing the monies in the fund available to pensioners, reflected as the funded status of the fund. Which is already underfunded…. this shortfall for government pensions comes out of the sinking fund or the consolidated fund.
So, unless there is also reform in terms of BENEFITS PAID, this is simply a matter of taking on more debt, sticking younger bermudians with the bill later in the day. Unfortunately, as our population pyramid is inverted (more old people, due to baby boomers retiring) we do not have enough potential wage earners to contribute to the pension fund, which will see more drawdowns than contributions until it is bankrupt. Leaving the taxpayers with the bills.
@ thoughts
Your analysis is correct about standard defined benefit programs but in this instance you are missing a critical point.
The proposal is to stop contributions AND beneifts for 2012(13). Thus there is no net impact on teh pension plan or the fund as a result of the proposed action.
See my example later in this string of posts.
Where do you get the idea there will be an impact on benefits? There is nothing in any announcements about it.
Election Election Election. Still great news and a great move on behalf of the Premier/PLP thank you kindly
Not enough! Should be AT LEAST 15%!! They make from 2 to 5 times the average person’s salary in Bermuda, so this is just pandering. Not impressed.
MPs make $56,000 a year.. WELL below average/median salary.
Stop LYING to people, it doesn’t help your cause.
MP with no ministerial responsibilities is really a part-time job. they all have other sources of income outside of politics.
@ Understanding once again: if you think the average person’s salary is more than $56,000, you must only know government workers, as the rest of us aren’t that fortunate. Median salary takes into account those privileged folk who earn 6 and 7 figure salaries, and so that measurement is skewed.
It’s no longer convenient for some people to boast that Bermuda has the third highest per capita income in the world. I guess that was only a fact under the UBP.
It was and that’s why it was boasted…
Those people that you speak of that are no longer conveniently able to boast that we had the third highest per capita income, who are they? the PLP? I could see why.
But Bermuda DOES HAVE probably the highest paid politicians, in relation to population (small town), in the whole blinkin’ world!!
56K per year with lots of benefits that add to that number. I bet if we all put our heads together we can all think of a few….any thoughts….hmmmmm
Lots of benefits like what?
The get 12.5% taken out for pension.
They pay payroll tax, social insurance, Health Care if it is their only job.
So what benefits are you talking about?
What Benefits? Really? How about these to start with……..Cars and free gas, insurance and free licence for the cars. Every year. Everyone seems to have a car. Can they not afford to purchase and operate their own cars at their own expense?
If we added up the cars and related costs per annum I bet we could save a big chunk of money. Add to that all of the largely unnecessary business class travel for ministers and their entourages, top hotels, food, entertainment etc. whilst they are abroad on these unnecessary trips and we will find even more costs that can be eliminated.
This is how you start tightening the belt. Not by passing the burden you created onto future generations!
I totally agree with you.
“Not by passing the burden YOU created onto future generations”
I don’t even thing some of these ministers can find belts to fit their over stuffed bodies these days.
Cut all their salaries by 50% – live like alot of other Bermudians are having to do these days. Catch the bus, ferry, hitch a ride with one of your voters.
Show us what you are really made of. I’m tired of seeing mininsters and their (our) cars parked, driven in all sorts of unnecessary places.
Please read this online web page ( i have the link after this sentence, You will see the the premier and her cabinet are paid well over 56k a year….
http://bermuda-online.org/bdagovt.htm
So this is what it says on the premier:
“Highest paid Cabinet member, on an annual salary of $224,092 in 2011/2012. She has use of a Bermuda Government car, GP1, a BMW 750Li. She also gets health insurance, a pension, a parking space at Sessions House and a credit card.
Derrick Burgess:
“One of the highest paid Cabinet members, on an annual salary of $184,414 in 2011.” plus perk of course.
That just an example of what information there is and accessable…..and What we can really read up on instead of just listening to what we are fed.
I don’t know about you , but the average Bermudian Makes nothing near that. And you bet your boots they should Be taking a huge pay cut!!! We have to sacrifice so do they. CUT UP the Credit cards, get rid of the cars and take a pay cut. I’ve said it before and will continue to say it….
@ Understanding which is a GOOD salary considering the fact that it is part-time, and in MOST cases their SECOND job..so YES they are making out like bandits……..
I don’t think the Unions will be too impressed, either.
So the PLP offer to take a bigger cut than they are asking the unions to take and you say the unions won’t be impressed. No pleasing you is there.
The unions wanted Minister to take 10% pay cut….. They make much more that the civil servants and they want them to take a paycut of 8% AND take another 8% from their pension contibution?
Wee Pow.
Actually most civil servants make more than MPs, and there are quite a few civil servants that make most than ministers.
I never mentioned anything about MPs in my initial post… I specially stated Ministers who make 150K+. Very very few civil servants make that much.
Furthermore, Vast majority if not all MPs have a full-time job, therefore 50k is like a part-time hustle.
If they were truly for the people, they would take the same cut as they are asking their workers which would show solidarity.
About Time!: Re “most civil servants make more than MPs”…most civil servants also work much harder than those MPs! Civil servants must show up for work and earn their salaries. There probably are some civil servants who receive higher salaries than government ministers…now is the time to weed out those whose salaries outweigh their qualifications.
“Civil servants must show up for work and earn their salaries…” but not necessarily actually work. Is that what you are saying?
“Understanding”, let’s make it simple.
Paula Cox will be 5% worse off.
The unions will be 0% worse off, because since many public workers are on defined benefit plans they lose nothing by having no pension contributions for a year.
Everything is being dressed up as a big personal sacrifice. In reality, it’s all a sham to put off pension contributions until the future. It’s a stupid move.
@ Understanding: Please stop trying to make out like the PLP offer is bigger. They offered 5% versus 8%. The pension swizz is designed to have null effect on their salaries.
What a poorly written letter. Rather than be specific she refers “to media reports”. Does this mean that media reports are always correct? I also think the left of a “ZERO” should have been 50% not 5%!
Somethin smells fi$hy! Sound like a +3% increase to me. They only doin somethin cuz de elections right round de corner and the OBA suggested it first!!! When it was de UBP they all agreed to do it…n guess who didn’t!? YA…WAKE UP!!
Pathetic…..not nearly enough……then they are going to ask the Government worker to take an 8% cut…who do you think is going to feel it most the $40000 worker losing $3200 or Premier Cox losing $10,000….
Of course the worker is going to feel it more…with Madame Premier just cutting back on a little on her savings account this year…
It should have been for all government workers….3% if earnings are below $40,000..4% below $50,000 etc up to a limit of 15% over $160,000…..
make those on top feel it as much as those on bottom since it is those on top making all the bad decisons..
Um.. they asked the Gov worker to take 8% and they are taking 17.5%.. Please don’t confuse the facts.
It’s not hard to confuse. The letter is purposefully unclear. This is the PLP (we had to deceive you) after all.
How about cutting up the credit cards and foregoing first class travel as well? These will almost certainly achieve even more savings for the taxpayer.
Never gonna happen. They measure their self-worth by how much first class travel they get to do.
As far as I know they don’t travel first class anymore. How about getting your facts straight?
Well then I guess my eyes must deceive me as I walk through many first class cabins and see PLP ministers enjoying their orange juice and/or water before take-off.
@ 34n64w
I think you are wrong about Cabinet Ministers and all government travel. They do not pay for first class travel but it is possible for the airlines to offer courtesy upgrades at the airline’s discretion.
AGREED! have seen it with my own two eyes!
They definitely do still travel first class. Seen it with my own eyes. Civil servants too.
@ Rick Rock
They definietly do not pay for firs class tickets. As stated, airlines sometimes do complimentary upgrades!!
Minister do indeed travel first class and Business Class. On the BA flight I often see the Ministers and their support staff in Business. I can understand the Minister but not the other Civil Servants.
@ John Dog
Business class and first class are different.
hahahaah Semantics….next time i will take a picture and post it. If they are not paying for it then we are
and i don’t think the “airline” cares about who they are enough to give them an upgrade…So if they are being upgraded, It’s the check in desk employees and NOT the airline doing so. Just sayin….
R u joking. I was on a flight from Boston to Bermuda (2.5hrs) the other day and guess what a government minster and his wife were flying first class. And even if he upgraded the miles should belong to the govt.to be used towards his next flight not him to personally upgrade.
PS:i over heard him say he was on Govt business. What a joke.
I recently (January 2012) was on a flight to Miami and Madame Premier, Minister Furbert and about 4-5 other Government officials were all in first/Business class. So if you think it’s been cut out…you are SOL or stuck on stupid…whichever one.
According to your logic.. they asked the Govts worker to take 16%… Dont spin reality..
So… their pension is reduced more than the Gov’t workers, but the actual cut from their salary is less.
Nope you got it wrong, actual cut to Salary is 17.5%.. Do your best to read above.
Lets see…. Civil servant/Govt worker -8% pension -8% wage = 16%
Minister/MP -5% wage -12.5% penion = 17.5%
Where have I gone wrong… I did say gov’t worker NOT Minister/MP… please show me where a govt worker actual cut to salary is 17.5%???
Unless you misundastood when I said ‘they’ I meant ministers.
Reply if I am incorrect..
Current Gross Pay: $120
Less 12.5% Pension ($15)
Take home: $105
New Gross Pay (120 – 17.5%): $99
Less 0% Pension: 0
Take Home $99.
When Gross pay goes down from 120 to 99, its called a 17.5% decrease…
Stop spinning so hard
Your math is wrong
Your math is so, so wrong.
NOW:
Gross Pay = $100.
Less 12.5% pension deduction ($12.50)
Take home pay = $87.50
UNDER PROPOSAL:
Gross pay = $100
Less 5% pay cut ($5)
Less 0% pension deduction
Take home pay: $95.
Either the Premier’s letter is terribly confusing and poorly written, or this is NOT a 17.5% pay cut. In fact, the MPs could end up with more in their take home pay than they started with.
You have finally exposed the truth
@ undertanding it doesn’t appear as if you are truly UNDERSTANDING….get somebody to SHOW you actual figures instead of saying 17.5 is GREATER THAN 8. On paper yes it APPEARS that way but again I implore you to do the math!!!!
@Understanding..
Have you read the Premiers letter?
They are porposing a 5% cut and will not be paying into thier pensions which equal 12.5% of thier pay. The salaries will only be reduced by 5%
Government Workers have been asked to take an 8% pay cut and defer payments to pensions.
Governement Worker will feel a bigger burden.
Now what I would like to see is the opposition (both parties) offer to talke the 17% as a real pay cut, and maintain the payments into the pension fund….. Now that would take some testicular fortitude!!
It would influence alot of voters at de polls …
@ Soooooo
Your suggestion would be nore costly to government (tax payers) in the long run since Parliamentarians would make a smaller contribution to the pension plan but get the same benefit at retirement.
… be careful what you ask for.
Under what Cox has suggested there is ZERO contribution. Absolute BS isn’t it.
Agreed.. sooo is proposing a different recommendation.
Could someone please clarify this situation? Will ministers be taking a 5% or 17.5% paycut? If it is 17.5%, then were does this figure come from?
I think it comes from 12.5% they pay in pensions plus 5%.
I know that their pensions amounts are different, so that is my guess.
ok Gracias
No seas pendejo,entiendes.
Vente tomar por culo idiota!!! Entiendes ahora???
So MPs won’t have to pay their 12.5% pension contribution… which is, in effect, a 12.5% increase in salary… Then they say they are gonna cut their ridiculous salaries by 5%… so again, in effect, they are giving themselves a 7.5% INCREASE in salary!!
That can’t be right… Can it? We had to deceive you.
CORRECT starman the proposal will result in an INCREASE in pay to MP’s and Ministers of 7.5 percent! That is crazy! I guess this is why Bermuda is in such a mess now, because we have people like the Finance Minister who cannot understand simple Maths!!!
Or voters like you that cannot read….
Nice try, but you know that is not the case. Note it says a 12.5% reduction and a FURTHER 5% reduction to equal 17.5%. I know you need to try to catch up for your OBA friends, but don’t misrepresent the facts.
“period of one year cessation of pension contributions” she stated in the letter
So, the 12.5% is the pension contribution (based on one of your posts).. she sed cessation of pension contributions I assume that 12.5% will not be deducted (similar to the union proposal).
Please do the math cuzzy
Ok… 5% pay cut
……..6.2% that would go to the pension fund from their pay (presumably is staying with G’mnt)
……..6.2% that G”nt pays into the pension fund stays with G’mnt.
Then we tge taxpaer pick up the cost when they come to paying he shortfall into th fund in future years. How about 12% cut in salary, Paula can backdate her cut to the time where she belittled the idea of taking a cut and spun it say it took strength not to take a cut. 12% cut is less than 17% so they should be very happy. Go on, do that and stop pulling the wool over the taxpayers eyes.
Totally agree with you Hmmmm
Me too. It’s a total sham.
Of corse the OBA will agree to this. The OBA are the ones that proposed this some months ago now Paula decides to see the light after all this time. Told you specialgirl OBA and Bob Richards knows best. On another note it would help the premier if she signed her signature as Cox and not Cog!
They have agreed, with one condition… that Ministers take a 10% salary cut!
Convenient as OBA don’t have ministers….LMAO
Since the 2010-11 Budget was titled “Resetting the Dial” let’s roll back Parliamentary salaries to 1998 levels. Now that would be a more meaningful saving.
Now your talking sense, I mean cents
I am hoping the OBA do NOT agree to this. They should counter offer a sliding scale pay cut (15% at the top, down to 5% at the bottom end of the pay scale) with NO reduction in pension payments. Reducing pension payments impacts the taxpayer in the long run. Pay cuts that are actual pay cuts would demonstrate compassion and an understanding of what the ordinary Bermudian is presently enduring.
@ Cancer, of course you do not know what Premier Cox had proposed several weeks ago, also it is clearly noted that you are not aware of what she has been discussing and planning. Mr. Richard’s is not the original developer of this idea. He believes he is because he went “public with it”. However, Premier Cox knows what she is doing, and when it is best to make such an offer. An intelligent politician knows when it is best to put some cards on the table, and hold others back, but it does not suggest she does not have any ideas. She got a long list of options to explore, it just about the “timing”. A smart politician knows that “timing is everything.” So the “trump card” Mr. Richard’s was using on OBA/UBP’s political “platform” that all MPs will take a pay-cut, just got played. Revisions to your party platform, now is required.
Nevertheless, this is bigger than politics, it about all of Bermuda.
You’re on the wrong thread. The dreamer thread is Wayne Furbert’s tourism dreams.
Very funny!
“An intelligent politician knows when it is best to put some cards on the table, and hold others back …” I’ll remember that phrase specialgirl.
Ace girl..
Do you know what the MP’s & Ministers are proposing for their ‘cut’… they actually will be taking 7.5% more of what their current salary according to their plan..
You do know this right?
In case you need an example
MP/Minister takes home $100 per week.
Their proposal.. no pension contribution & 5% pay cut
They dont contribute to pension = +$12.5
So they take home $112.50
Subtract their PAY CUT of 5% =$5
Total take home pay = $107.50
Yup….. very intelligent
My bad.. $6.75 to pension.
Thus they take home $101.75
Still more than their original salary
Dude you have it wrong…
If a minister takes home 100 a week… His GROSS salary is more.. But lets follow your arguement.
Current Gross Pay: $140
Less 12.5% Pension ($15)
Take home: $105
New Gross Pay (140 – 17.5%): $99
Less 0% Pension: 0
Take Home $99.
Do you undertand now or are you still not getting it?
Correction.. messed up my math! Dude you have it wrong…
If a minister takes home 100 a week… His GROSS salary is more.. But lets follow your arguement.
Current Gross Pay: $120
Less 12.5% Pension ($15)
Take home: $105
New Gross Pay (120 – 17.5%): $99
Less 0% Pension: 0
Take Home $99.
Do you undertand now or are you still not getting it?
You are forgetting that they will not be paying the 12.5% for pension for 12 months so I stand by my original point. Take home salary will be increased…
Using your example:
They wont be paying into the pension 12.5% so technically they will take home $135, subtract the 5% paycut ($6) and what are you left with…
Correct me if I am wrong.
I acknowledge pensions down the road they (MPs/Ministers) will take a bigger hit than CSs, but then again they more than likely will be better off than the avg CS.
Just for clarification, if Ministers/MPs pay 12.5% for pension.. I am assuming Gov’t matches that contribution.. so they are getting 25% for pension????
Can’t keep arguing the facts.. Even when math is pointed out to you, you come up with some weird outcome.
I pointed out what it woudl be above.. and you are still double counting somehere.
17.5% decrease in Gross pay, just accept the facts.
lololol… Just answer this.. IF THE MINISTERS DO NOT PAY PENSION FOR 12 MONTHS, WILL THEY TAKE HOME 12.5%?
How am I wrong in my calculation in my 11:48pm post? Please answer this… and I wont post anymore.
Its not weird math, its unspun math..
You actually think people are stupid?
Again your math is wrong
There’s no 17.5% decrease in gross pay. There’s a 5% cut in gross pay–that’s what Cox asked for. Read the letter. Five percent. Five percent. Then she said they wouldn’t deduct the 12.5 percent pension amount. Thus,they actually end up with more in their take home pay. (SEE COMMENT ABOVE LAYING OUT THE FIGURES)
But in your example the take home pay is reduced from $105 to $99. Your math is not quite right, but essentially what your numbers demo is a 5% cut in take home pay. Not 17.5%.
And no impact on final pension, so the rest of it doesn’t matter to the individual.
He/she thinks we are stupid.
You are all wrong.
Using your example.
Current gross pay $100
No pension deduction (6.25% employee portion = $6.25 savings)
5% pay cut ($100 less $5.00 = $95.00)
$1.25 per $100 better off
Government saves payment of their portion of contribution
This will come back to haunt everyone when they find that they need to work longer to afford to retire.
Clarrification needed in regard to volantary contributions. Can an employee still contribute?
Scary times ahead.
Soooo… it’s NOT about transparency, then? Is that what you’re saying?
I thought we were all promised transparency…
If Premier Cog knew what she was doing, why is it that every year she has been the Finance Minister, has our debt GROWN year after year?
When the “Honorable” Finance Minister/ Premier went to the meeting to tell the union workers to take an 8% pay cut, WHY DID SHE NOT TELL THE WORKERS THEN THAT SHE AND HER CABINET COLLEAGUES WERE PREPARED TO TAKE A 10% CUT AT THAT SAME MEETING? Premier Cog had to go BACK to Alaska Hall, and was obviously FORCED by the WORKERS, to actually LEAD. That meeting almost exploded at the indignation felt by the workers towards the Premier’s demands.
The Premier stated in the Chapter 1 Purpose of the 2012-13 Pre-Budget Report pg 3, that: “There is a financing gap between the stimulus policies that we would like to continue in order to protect jobs and the policies we are able to finance due to diminished revenues. THE GOVERNMENTS MUST EITHER CONTINUE TO BORROW FUNDS TO BRIDGE THIS FINANCING GAP, OR MUST CUT SPENDING TO ACCOMMODATE ACTUAL REVENUES.”
That definitely DOES NOT sound like a “long list of options to explore.”
the debt has grown because we have built the Dockyard Pier, Loughlands, harbourview village, sylvia richardson facility, dame lois browne evans building, and invested in social programs such as mirrors, and also increased the benefits of seniors, financial assistance, and child day care. So dont be one that thinks that nothing has been done to benefit from the debt. we could easily have no debt. but we would also easily have had no investment in our country.
What a lot of nonsense! They did build and spent on a totally uncontrolled basis. It is their complete lack of any fiscal control or prudence aligned with their chasing out IB which is responsible. So don’t talk dribble.
Or they could have spaced out what they wanted to over a realistic time period and got value for money instead of back to back overspending/budget for EVERY construction project stated above. Due to wanting to look like they were doing something (while taking a little extra) many great things they burdened the public with massive debt and reduced benefits such as child care, costly seniors future care, reduced mirrors programs budget, could not help or would not help the sun shine league and have had to virtually revise or repealed their own policies due to un-thought of consequences. Other than that they’ve done a good job ………….for them selves…………
LOL
this is not an endorsement for the OBA at all this is completely a reflection on what the PLP have done in their time in office.
Have you really read the Premiers’s letter! In my humble opinion it shows just how poor a leader she really is. It does not clearly indicate anything other than confusion.
A start, but NOT good enough . . . They should take as a minimum cut the same as they expect the civil servants to do, plus reduce their benefits, e.g. Ministers cars not to be used for private use i.e. going to play golf at Port Royal on Saturday like GP 5 was on January 21st!
Why does the Leader of the country have to ask (beg) workers to take a pay cut? Makes the Premier look weak.
@Work,
Cox is just fooling the dumb. Before she calls the election she needs to touch hands with the workers, Town hall meetings are her Barometer, when things calm down and the union of workers feel a part, She will Strike!
Paula Cox is a weak leader,and I think we all know it.she should never have been put in this position….and else for her being our finance minister !!!she should never have benn allowed to take on this role.
Paula, could not say NO to our former premier,and he got away with all of his deals,, cause she did not have the balls to defy him… how sad is this ?
DOnt be ridiculous. Have you ever heard of a bipartisan approach. Consensus building. But unfortunately the OBA are like the Tea Party in the United States. Disagree for the sake of disagreeing.
Disagreeing for the sake of disagreeing is not like the Tea Party at all. You are continuing to try to put a label on the opposition you know would be taken as “those racists over there”, leave the US out of Bermuda we do not have the same attitudes and world view they have well some of us anyway. Instead of dealing with the issue you are calling people names and in this case the hater calling others the haters. What was it that those PLP bloggers talk about, right upping the level of debate and week arguments calling people names………..
LOL “if the shoe fits let them wear it”………….
What does my question have to do with the OBA or Tea Party? Unless the Union is a registered political party, bipartisan and consensus are not required. It’s so hard to debate a topic when so many people go off topic.
@Itsaboutallofus: Party politics is all about disagreeing with everything the government does. That’s the oppositions role.
Maybe people need to brush up party politics.
Like the PLP took a bipartisan approach when there were opposition
I’m hoping the same applies to the Governor and the Deputy Governor. Same with their cars as has been suggested.
I tink we shud focus on ya peeps firss.. dan we deal wit the queens bredrin
Why, they didnt put us in trouble?
Ms, Furbert….Lets not forget Union leaders and staff! Should they follow the example! Weve seen their 10 year old late financials showing lots of spending, little benefits to the membershiip and litlle in the bank.
Lavern, for once I agree with you,the Governors that come to bda are a waste of time …and I think they should also take a huge pay cut !!!!!!!! if you think about it they come here and do absolutely nothing ….and get paid for having a good time on our dime…..if you think about it what the hell has Gozney done since his arrival in bda ?
Gotta agree with you, Gozney is essentially useless.
And all officers of the union?
your people are the effinf reason we are in this place. and you want to pointing the finger to other people.
Suddenly you’re against government cars LaVerne?
Where were you for the past 13 years?
Let’s do this LaVerne. Roll it back to where it was prior to the PLP in 1998. That would reduce the no. of Government cars by – what – about 200. That would save some money, and would have no impact at all on the services being received by the public.
We do not have control over the Governor do we “8 vote”? We are dealing with what we do control. Everything else is just so misplaced comment by you and those that want total control to deflect attention to this issue. INDEPENDENCE IS NOT A FIX ALL FOR BERMUDA INFACT IT HAS ONLY ONE POSSIBLE BENIFIT WHICH IS BRAGGING RIGHTS AND THAT’S IT.
LOL
A 5% pay cut. What a dam insult you gotta be kidding me. Most of those senators and MP’s are getting two salaries now WTF man!!!
OBA – you missed a golden opportunity with your reply. Disappointing.
The OBA really did let us down. They’ve gotta do better than that. And more urgently too. And to think that I thought that the OBA was on the ball. Not.
Not enough of a cut. This sounds like a vote getting exercise. The cut should be the same that is expected of the workers earning so much less. I haven’t had a pay increase for 4 years, but other expenses have continually gone up.
We should have elections every year seems things get done during election time..
Agreed but in fact the contiual election mode of the PLP from 2003 onward is a helthy part of way we are in this type of possition we are in today. Constantly trying to look like they were doning something when infact the over all benifits have not been a good return for the money spent.
LOL
What’s getting done…??
5% LMAO!!! That’s nothing. Madam Premier not every one is stupid.
My idea is let’s look out for the small business, & cut payroll taxes for year!!!! Now that’s sweet music to my ears!!! Ahhhhhh plop plop phizz phizz oh what a relief that is!!!
Mr. Cannonnier,
I applaud you on your response to the Premier’s RELUCTANT and pitiful ATTEMPT at damage control!
As the leader of the Government, the “Honorable” Premier wanted workers to take a 8% pay cut, while not being prepared to lead from the front and take the same cut or more. She had to be ASKED by the union to LEAD by EXAMPLE. But it shows you who the leader is because she had to go back to her Cabinet to get their permission to cut their pay by HALF the amount, they wanted workers to cut their wages by.
Nice work pointing out the Hypocrisy!
Paula leading from behind again. Anyway… Burgess is the real power in the Cabinet.
Once again Mr. Cannonier is showing his political naivety by responding to a letter from the Premier by way of a press statement to Bernews, even after the Premier referred to him as “Honourable”.
I hope he has data to back up his claim about the use of credit cards and expense accounts by Government Mnisters. If it has been allowed to get out of control as he has stated, it means that the civil servants are not doing their jobs.
OBA should have asked Ministers to take a 15% cut and the rest 10% and no suspension of pension payments, which is the most ridiculous aspect of all the “cuts” being batted about as it equates to no cuts and simply passes on expenses to all tax payers.
Something like this would have put things squarely on government’s shoulders. Unfortunate.
Agree…. Cutting pension contributions is nothing more than borrowing from our children…. Children that most of us have worked our a$$’$ off to have better than we did…..
He’ll I had a 12 year old tell me the same thing tonight…. Maybe G’mnt needs to go back to school!!!
tru
Ms. Furbert, why always the red herring? Stick to the issues. Just from today, the article about minister’s pay cuts and OBA’s response was turned into a discussion about the governor. Now it’s trying to take a hit at Mr. Cannonier’s method of response. Really?
I hope you leave us all alone Laverne, plop official voice, do you understand a balanced view?
And when the Auditor General tries to do her job we all know what happens.
Laverne not everyone has data to back up claims its called common sense its seems that is the catch phrase to end speculation. Unless your going to take it further ie: the courts data is not necessary. Or if your like a certain former Premier you never leave a paper trail.
Mr. Cannonier is showing transparency “8 vote”. Deal with it that’s what transparency is letting the public know what is happening……… you always make me……….
LOL
You are getting off the point. But for the record, the Premier sent her letter to the media before sending it to the Opposition Leader. Was that “honourable?” He found out about it when Moreno called him for comment.
Cut this and Cut that has anyone looked at the cilvil servants and the job they do many and I say many as I am one can do with doing some work it is so terrible how there is no accountability. People being paid to do very little and it is at the top the bosses are tooooo laid back
Totally agree Gambler!
in 2012…
- The Governor of Bermuda from December 2007 is career diplomat Sir Richard Gozney.
- His 2011 salary is $231,800 paid by the Bermuda Government.
- His perks include the use of a BMW 750Li
- The salaries of the Governor, Deputy Governor and their staff are paid by Bermuda’s taxpayers,
A small price to pay for the lease of the queens Property Bermuda.
Who cares what the Govener is doning, we are dealing with what we can change and that is keeping the elected officials accountable to the people who elected them. Is that the best argument you can come up with? Go chill with”8 vote”.
LOL
Mr. Cannioner’s response sounds like something that “Mr. Richards” would say. Guess the response was crafted by him and Mr. Dunkley, or the secret group that meeting in fairy lands. His reply appears to be a struggle to impact the proposal. He is now pulling at small items, to make an impact statement…which fails. A smart politician knows that cuts were on the cards a long time ago, as almost every country worldwide had to cut-back on the Civil Servants and government sector. While Premier Cox did not play this card immediately, she knew without a doubt in time she would. It does not take Rocket Science to figure this out….,it was just a matter of when Premier Cox would play her card.
Congratulations specialgirl4you.
It is impressive how much spin you have been able to endure!
SG – Ur happy with the math of the PLP proposal then?
Nuthin special bout you girl! Same ol rhetoric.
You certainly make Premier Cox sound very conniving. She has lost a whole lot of credibility by stalling on the pay cut issue. The vast majority of Bermudians have been crying out for a move in this direction for at least a year. This is an issue that crosses all political boundaries. To use it as a bargaining chip at this stage, as you suggest, makes her look like she has been out of touch with reality, to the average person.
I agree with Ms. Furbert. Governor etc. should take a cut as well. I also agree that Union leaders should take a cut. (real cuts – not ones just passed on to the rest of us with pension payment deferrals – that aspect is a joke)
The Premier stated when first approached with the idea of PLP MP’s taking a 10% pay cut (Chris Furbert suggested this number by the way) that this was politricks and made some other random statements I can’t even remember put she basically said no to the suggestion. NOW…the govt’s backs are up against the wall so she is begging for the unions to take an 8% paycut which they have agreed to and in return govt has ‘generously’ agreed to 5%!! What a crock!! WAKE UP BERMUDA!!!!
Interesting, the Premier and her party have consistently opposed taking a pay cut for the past year or more, and have TWICE asked union members to accept pay freezes and pay cuts.
The O.B.A. has ALWAYS called for a 10% pay cut and yet posters online call their response to the P.L.P.’s “offer” of 5% inadequate? Underwhelming? Unfortunate?
The $160,000 per year Ministers only wanted to take a 5% decrease!?! They wanted their union “Brothers and Sisters” to take an 8% decrease in pay!?!
HYPOCRITES!!!
What is the shorthand for HYPOCRITE …. P.L.P.
Do you really believe the lies you are typing.
It the government asked the union to take an 8% cut, while they are taking a 17.5% cut, what exatly are you complaining about?
You keep making up stuff, people won’t beleive your BS.
@Understanding
Please understand that the Union will not be taking an 8% pay cut. It is 14.8%, see below.
Say your base salary is $100. You “save” $8 to your pension and your employer gives you a benefit of $8 “saved” to your pension. All in all you are paid $108 (base salary + pension benefit) as your remuneration. With the Government’s proposal you are giving up $16 of your $108; $8 from base salary and $8 from pension benefit.
Therefore your receiving a cut of $16 / $108 = 14.8%.
But wait, there is more. As communicated, the deal simply stops the $16 from being paid and the Union takes home the say pay. However, the Union is making less money (only $94 instead of $108). Therefore, the payroll tax paid by the Union should be lower. That should mean that the Union takes home a little more pay then current. So it appears the Government intends to pay you $94 but tax you as if you are still earning the $108.
If you are in the 7% tax bracket then your tax on $108 would be $7.56. On $94 it would be $6.58. Therefore you would be being overcharged payroll tax of $0.98. Add that to the $16 loss from pension for a total loss of $16.98.
Now your reduction is $16.98 / $108 = 15.7%
You have to decide how this 15.7% compares to the MP’s 17.5%. However, keep in mind for most of the backbenchers that this is their part-time job.
Also keep in mind that you are being mislead by the Government on the true impact to your remuneration. Just as they worked out that their 5% cut equated to a 17.5% real impact they did work out the Union’s 8% cut equated to a 15.7% real impact. They just didn’t want you to know. But they give you the real impact for their cut. The 8% to 17.5% comparison is not an apples to apples comparison. Its a “6 for 9″ comparison.
Ride
@ Ride
This is a more concise analysis of what is being proposed. To be more complete, we will also have to factor in the real ‘loss’ to the employees by calculating the present value of the one year benefit that will be lost over the expected life of the employees. This would be an unnecessarily complex discussion of a simple issue.
To answer your main point, the proposal is to reduce the gross pay of employees and parliamentarians. Thus your comment about overpaying your payroll tax is not correct.
@Vote for Me
The point concerning the payroll tax is correct. The Union’s pay is being decreased but their payroll tax is not following in line, as the deal has been communicated. Therefore, there is a payroll tax overcharge and this overcharge should be considered in calculating the impact.
The Union would help out the Government by saving it spending $16 on the $108 remuneration. As a reward for working with Government the Union would hit with a hidden $0.98 overcharge instead of the $0.98 being given to the Union worker. Giving it to the Union worker would do more to stimulate the economy then putting it in the hands of Government.
Let’s address the issue of the impact to the Union’s pension by forgoing the $16. The present value of 12 month end payments to their pension at a modest rate of 3% per annum is $188.92. That means, saving $16 a month for the next 12 months at an interest rate of 3% per annum is the same as getting a payment today of $188.92. That is $188.92 saved today for 12 months at an interest rate of 3% per annum would give me the same amount of money in 12 months as saving $16 each month at an interest rate of 3% per annum.
$188.92 is the present value of the $16 pension payments that the Union would miss out on; almost 2 months base salary as this is based on a $100 base salary.
What is the impact to your pension account depends on how many years you have until you begin to collect. The longer you have to wait to collect the greater the impact because the $188.92 has more time to grow. If the interest rate stays a modest 3% over the years (on average) then the following future payout is what would be given up.
10 years to pension: $253.89 ; two and one-half of today’s base salary
20 years to pension: $341.21 ; almost three and one-half today’s base salary
30 years to pension: $458.56 ; over four and one-half of today’s base salary
You see that you are giving up months of today’s salary in your future pension payout as the deal has been communicated. Keep this hidden future cost in mind as well as you negotiate.
In the end the Union will experience a loss no matter what the negotiated solution. The Governments labour cost are simply too high a percentage of its income given its other commitments. I hope the Union is communicating the true cost of the deal so there are no surprises or resentments down the line.
Ride
@ Ride
You offer a good technical analysis except for one point.
If the employee salary is reduced from $100 to $92, there will be a reduced payroll tax liability because the payroll tax will be based on the $92 and not the origianl $100.
And no one is believing you but keep trying to write it so it’s the last thing people see. PR (political robot)……
LOL
Electon and Budget….. Soooooo..
Here we have a Premier/Finance Minister, with a budget which needs to be announced in a few months, a budget that looks to hit the public hard. She has two choices…
1. Come up with something “different” that will look to the people as a “gift to them” and call an election before the budget is released
Or
2. Throw a budget that is ” we had to deceive you” and call the election immediately afterward. Then raise taxes quickly and hope for the best….
Either way the people are going to have to pay the price…
My guess is # 1…an election will be called before, or during the budget ( no referendum on gameing), and a NASTY budget to follow…..
@specialgirl of course i beg to differ with the analysis of your premier. Once again she has shown her true colours.. that is to say that she is a very weak premier. It again shows why I say the PLP is a flipPLoP party because all they do is say one bing then have to turn around and do another. As stated in the editorial when this was suggested the Cog suggested this was an empty gesture. Her along with your other blind follower Laverne said MP’s work hard for their money and deemed this wasn’t necessary. This once again shows the bad foresight of the PLP and have no planning strategies for the island going forward. The Cog has only made this reluctant move because only now she sees how the island is struggling along with trying to get the civil servants to agree to her proposal. Why now is she throwing out this offer when it was put on the table months ago by the OBA? This is just a last desperate move on her behalf because as I said – lack of foresight. The overseas foreign consultant giving Paula financial advise should be fired. Bermuda and it’s people cannot handle od afford another five years of this type of bad governance and bad foresight. That is why so many of us want change! Many of us are mad!!!! I know I am….This is the lowest point Bermuda has been put thru and the election needs to be called sooner rather than later so that the OBA can clean this island up!
Craig your response to this mess is right on…. And you are the Premier-in-waiting! Hang in there!
Premier in waiting.. You aren’t serious are you.
Someone who wants to be leader should have the respect of replying directly as opposed to via the media.
So that the public would not know about it…right I ‘Understand’ now what the PLP meant about transparency: definition only when it works for you screw the people of Bermuda……….
LOL no thanks he did the right thing in telling the people.
Yes Craig hang on Michael will be kicking you out after you win the election for them. No that’s wrong he will tell Bob Richards to do the good deed and show you the door. That’s the reason I’m voting OBA to see you fall flat on your face. This is going to better then when they demoted Jeniffer Smith.
I can’t wait for your turn. See you at the polls and yes I’m voting OBA just because.
@ Jame,
Jennifer was demoted?
Really? By whom?
@Cancer, stop kidding yourself and hiding under your hoodie….You know Mr.Cannioner can not walk the same line as Premier Cox. He is not even capable of a debate against her, that is why you send Mr.Richards. Mr. Richard’s describe him as “COLT”. Stop the sillyness and face the reality of the situation. You know that Premier Cox is very brilliant leader and extremely intelligent. Just that your “blindness” to the OBA/UBP prevents you and others from seeing it any other way. This government has done well, not perfect, but what governments are perfect.
Betty you to are wearing a hood. Hypocrite!
Craig Cannonier’s strength, which is having no political experience is also his weakness, having no political experience. On the other hand Paula Cox has loads of political experience, a strength but also a weakness, as she is constantly haunted by actions she had taken in the past. There is so much more ammunition against Paula Cox right now that I actually think Craig Cannonier has an advantage of being a fresh face in politics, untarnished by previous events. Paula Cox for all her intelligence has not guided Bermuda well. She is obviously a nice person, if somewhat beguiling – but not a good Leader. We shouldn’t get the two mixed up. Yes, Paula Cox would walk all over Craig Cannonier in a debate, with her clever debating skills, but does that mean she is the best person to be Premier. Based on her record, I think not.
This too shall NOT pass!!!
All PLP supporters, seriously.. what do you think of this?
Mr. Cannonier’s response – atrocious.
He will accept if the Government gives up credit cards and expense accounts?
Is he for real?
because he knows if they take a decrease in pay they will abuse the cards when they go away….did we ever find out who spent the money at Victoria secret???? or do we have a short term memory…??
No that is still a “Secret”
The governor has taken home over a million dollars from bermudian taxpayers. for what?
Still nothing to do with the proposed cuts focus on what we can change independence will not help us out of debt infact I would argue it would lead to a great devaluation in our dollar. This is like someone criticizing everyone else for not liking them when in fact it’s the person’s issue that no one likes them. Deal with what you can change not things we are unable at this time to change.
LOL
OOOOOOO…so the PLP proposes a 5% cut which is really not a cut but a 6.5% in the pocket increase. Perfect sense….in the PLP world anyhow.
All while the rest of us are happy to be holding a job even if it means a 4 day paid week, shorter hours per day, people like landlords taking 15-20% less to get the few tennants around because the PLP has chased IB away, while they have to pay no less for maintenance, taxes, insurances etc.
The PLP proposes a 1 year 5% cut in pay!!!! Give us a break.
Where exactly did you make up this 6.5% increase from?
Current Gross Pay: $120
Less 12.5% Pension ($15)
Take home: $105
New Gross Pay (120 – 17.5%): $99
Less 0% Pension: 0
Take Home $99.
When Gross pay goes down from 120 to 99, its called a 17.5% decrease…
Stop spinning so hard
Pension based on gross pay
OK 5% pay cut
120 gross pay now = 114 take home. The rest is irrelevant as we will have to fund the shortfall in the future.
We will have to pay more if they do this. Don’t you get it. You are being robbed.
Not exactly,
As they aren’t contributing, they aren’t accruing benefits either, therefore, there is less to pay out in the future.
its not a pure D-B Plan. The act is avaialble online, you should read it.
It is a DB plan.
Mr. Cannonier stop acting like the dumb white rabbit who’s a character in Alice’s Adeventures in Wonderland. Bob is the Mad Hatter and the Milkman is the sneaky Cheshire Cat.
The Minister’s need the credit cards and your asking them to suspend their use of credit cards and expense accounts. How the hell are they going to pay for their hotels when they travel on Government business.
Now your playing politics when a simple yes would have been fine. As a civil servant God help this country if you get to be in charge. What a dumb bunny!
Thank you, finally a voice of reason!
How about they use their own credit cards and have to claim the expenses back. Their expenditure can then be checked and scrutinized. Only that which is needed and only to a predefined allowance should be allowable. It is an expenditure control and a good thing for the opposition to request. Giving members instant access to the full moneypot does not encourage careful and mederate spending.
Hmmmmm we have not always agreed in the past but I follow your logic.
LOL
Civil Servant I actually agree with you!
The biggest savings to the Governments spending should be with your paycheck! As LaVerne Furbert took great pains to educate the public to the fact that you guys are the ones who are causing all the overspending in the Ministries, my suggestion is that;
1) In a Ministry that overspends from the budget approved figures, Senior Civil Servants (C.S.) in that Ministry must lose 20% of their salaries to make up the overspending. If there is still a shortfall, The rest of the salaried C.S.’s in that Ministry must pay 10% until that overspending is covered.
SHARED SACRIFICE / ACCOUNTABILITY.
Since you folks enjoy the Third-Party spending of the Public Purse, perhaps this is what it will take to curb your out-of-control spending habits.
oh SNAP………….
LOL
Yeah, without credit cars how the hell will they pay for those lobster and champagne lunches? How will they settle the bill at the Ritz Carlton? How will they pay for the seat at the front of the plane? How will they pay for the limo?
They NEED those credit cards.
Who are we, the unwashed taxpaying public, to even question that?
@ Civil Servant
I work in International Business and I can tell you that it is a pretty normal practice for trips/conferences/training that we pay all of the expenses upfront and the Company then reimburses us.
That is a very normal practice.
I also can validate that IB and Int’l companies no longer provide company credit cards. You get reimbured for expense incurred based on the approval of items using a travel and expense policy.
I think that big savings could be had by downgrading perks – and government should do without cars, drivers etc. I remember former premiers riding mopeds!
Bermuda is NORMAL? Not!
@ Civil Servant…when all logic fails then resort to name calling and other childish tactics, so typical of a PLP operative. Listen, I work for a local business that requires international travel. Employees of my company use corporate credit cards primarily for entertaining clients and for travel expenses. It is standard practice that once the travel budget has been blown we receive instruction from upper management to STOP using our corporate credit cards and to suspend travel until further notice. This is a cost cutting expense and is not an unusual practice. The point of my mentioning this is that with the situation that this govt has put Bermuda in…ie near bankruptcy…it makes good business sense to stop using credit cards and to suspend all but essential travel until costs are brought under control. This is standard business practice something that obviously you, nor our pathetic govt understands.
And what makes you think that all travel essential travel hasn’t been suspended?
Because there are still trips to Shuttle Launches, Space Conferences in Paris, and Women of the Year Awards in the Bahamas.
If they had suspended all travel, believe me, they would be trumpeting it from the rooftops.
Wow In my opinion, reading the post from you OBA members/supporters really makes me SMH, you will never stop with your misinformation. Well you can not fool me because this is what I know; Government Ministers and MP’s contribute 12.5% to their pension, they have agreed to take a 12.5% decrease in their overall pay with a 1 year freeze in their pension contribution, in addition they have agreed to take a 5% cut in their take home pay,for a total of 17.5% cut in pay.
Some of you are trying to fool people into believing that MP’s and Ministers make the same contribution to pension as Civil Servants, but they don’t. Civil Servants contribute 8% MP’s and Ministers contribute 12.5%. Since they will be talking a 12.5% cut and it will balance out their take home pay with the freeze on pension contribution they have agreed to take a further 5% cut in take home pay so they will take home less then they do now, unlike the civil servants who’s pay will balance out. So all the spin you are putting on it will not work on anyone who can read and do simple math.
As to the OBA Party Leaders response to the Premiers request;in my opinion, the OBA does not make the calls and they a simply foolish in their response. They are only trying to stir things up more by giving conditions to their agreement. The fact is simple, you can join the Government MP’s and Ministers or not. The PLP Government does not need you to agree in order to take the cut themselves so your ether in or your out. The PLP MP’s Senators and Ministers have already agreed and will take the cut, if you want to refuse if they don’t meet your demands then go right ahead just remember you will be telling the people of Bermuda no, not just the Government. The same people you want to vote for you. Don’t be fooled people the OBA’s response is just a propaganda move to appear to be calling the shots on your behalf but they know they have no power in the overall result and will take the cut that the Government has agreed to regardless if Government agrees to their proposal or not, because otherwise they would only hurt themselves politically.
You are perpetrauting this “pay cut myth” when referring to the pension contribution. The MP, or Government worker, never receives it in the pay so to take it away makes no difference. It is not a tax cut, except in the minds of the PLP. Clarity: The MP does not take home $168,000, rather $168,000 less 12.5% = $147,000. That is what the pay is. What is occurring is that the 12.5% is being spent elsewhere, and will need to be put back into the Pension Fund so in effect rather than a pay cut, taxpayers are being asked to pay 100% more for the contribution to the Fund. That is the hard fact – Taxpayers to pay 100% more in Government pension contributions and see the reaction.
Makai- What makes you so persuaded that everyone who expresses discontent and anger with the PLP, by default, must be a OBA or UBP supporter. A reality that the PLP or its supporters are not addressing is that they have frustrated and disappointed many of its supporters and they are amongst the number of those who are complaining and posting.
That is a fact.
It’s not about the 8%, 17.5% or any other disingenuous attempt to placate the voters. The real issue is that the entire ruling party should take a 100% pay cut and hopefully at the next election. They TRIPLED the national debt and now say “VOTE FOR US” !!
You all owe ONE THOUSAND THREE HUNDRED MILLION DOLLARS! Got it?
Yes YOU! and your children of course who will see high taxes and cheap money grabs such as the new and improved $75 parking ticket! for the next, oh say 25 years. $100cash to whoever can remember the name of the PLP minister who proclaimed 2 elections ago, “..and you all thought we would not be able to manage the economy”
Is it a coincidence that GREEN is their color?
@understanding,
Maybe I’m wrong but what I see wrong with your calculation is and what was pointed out earlier is that they don’t get deducted 12.5% as stated in your calculation, But in fact when they contribute to their pension we deduct half which is,I’m guessing 6.25% and government puts in the other 6.25% so in actual fact by not contributing their half they save 6.5% and when you deduct 5% pay cut they actually increasing salary 1.5%.
@ uncovered
Yes, you are wrong. Parliamentarians pay 12.5% to their pension, whioch is matched by government – 25% in total.
Makai – do retired MP’s enjoy a defined benefit plan or defined contribution plan? If the former do the taxpayers fund the difference between available plan assets and the corresponding benefits?
If so, the Premier’s proposal is nothing more than a shift in funding obligations from the MPs to the taxpayers thereby footing taxpayers with an even larger burden in the future (especially when considering the time value of money).
@34n64w
MPs and all Public Officers have a defined benefit plan.
In this case though, the nature of teh plan is not directly relevant since there is a cessation of contributions AND benefits. To be clear, the Parliamentarians and Public Officers will not pay into the pension plan for 2012(13). They will also NOT be credited for the year of service. Therefore, there is no additional cost to the pension plan arising from the 2012(13) financial year.
I note that there should be more technical calculation to improve accuracy but I do not think it would change thrust of the discussion.
@Vote for Me
Can you provide some clarity on how their year of not contributing to the pension plan will be debited from their defined benefits? I feel that not enough has been discussed on the logistics of this pension cut and I want to understand it more clearly.
@ thoughts
The year will be debited by not including it in the calculation. For example, if I work for 30 years before retiring, I will receive credit for 29 years since I miss the benefit for 2012(13).
If we think it through in more detail, teh plan wil only work administratively, if the pay cuts are equal to the amounts employees pay as pension deductions.
I think all employees pay the same pension execept for Police (possibly 9%)
Is there anywhere I can see this outline?
Where do you get the idea there will be any impact on benefits? Cox’s letter just says there will be a ‘cessation of contributions’. Says nothing about any impact at all on benefits.
If she were suggestiong a reduction in MP’s pension benefits, don’t you think she’d be crowing about that too?
OK – lets do the maths
Civil Servant
Current gross pay – $100
Pension deduction 8
Net pay (take home pay) 92
New gross pay with 8% decrease 92
Pension deduction 0
Net pay (take home pay) 92
Parliamentarian
Current Gross pay 100.0
Pension deduction 12.5
Net pay (take home pay) 87.5
New Gross pay with 17.5% decrease 82.5
Pension deduction 0.0
Net Pay (take home pay) 82.5
Based on the above analysis, the Premier’s proposal will result in the Parliamentarian’s getting a smaller take home pay (i.e. 82.5% vs 87.5%) but the Public Officers (all unionised staff) will take not take home less pay then they are currently receiving (i.e. 92%). Therefore teh parliamentarians are making a bigger sacrifice than the Public Officers,
The example is simplified since there are other pay deductions including Social Insurance, Payroll Tax, Health Insurance etc. but the net impact is as shown above.
For greater clarity, the request as I understand it, is for noone to make pension contributions for a year (government or employees). On this basis, the employees (and Parliamentarians) will not get credit for the year toward their pension entitlement. Therefore the comments about costing the pension fund more money are incorrect. In fact, this proposal should save money for the pension fund since it apparently costs the pension fund more per year of retirement than the amount that is being contributed by each person.
In summary, this is an excellent proposal by the Premier. The Public Servants (Civil Servants, Police, Fire, Prison, BIU etc) will not have a reduction in their take home pay, no jobs will be lost, the pension funds gain a financial benefit and government will ‘take’ up to $65m less in taxes than they otherwise would.
Has it been clearly stated, and will it be legislated, that one year will not be credited? Even if it does, do you honestly think that in a year or two when contract negotiations commence this one year “lost” will not be replaced? Unfortunately the track record of of this Government, the one elected in 1998 not the one since 2010 under Premier Cox, honesty, trust and transparency has been lost. I wouldn’ty trust any agreements to hold.
@ Shaking the Head
Yes, the request has been clearly stated. The challenge for all of us is to hear the facts and try to understand before forming opinions.
If the ‘lost’ year is credited in the future, employees will have to double up their deductions – not likely to happen.
Thus, we can rest assured that the proposal is legitimate. I am not sure who thought of it first but we must collectively congratulate the Premier for putting it forward at this time of need. I hope that the union members will collectively agree to teh proposal.
You may congratulate the Premier, but I do not. It is a crazy situation to play with a Pension Plan, and a sign of extreme desparation. Remember a company in the UK named Maxwell Corp? Robert Maxwell looted the company’s Pension Plan to keep the company afloat, but it still went under and the pensioners lost everything. I’m not suggesting a total loss here, but the fund is already currently underfunded. There is a slippery slope here, in that now it has been done once, it will likely happen again. No contribution this year, what about next? I do not believe there will be any loss of benefits, but as you seem to know more about this idea than has been publicly announced does someone retiring next year lose a year of benefits? If not when does it apply? Is this legal under the statute? Please tell us more.
@ Vote for me. Thanks for the clarification, I would like to see the whole propoosal detailed for public consumption. As a retired civil servant I do understand superannuation. What I am challenged with is the fact that this appears to violate the current legal requirement for alll employers and employees to subscribe to a registered pension plan. As you appear better informed that I, can you explain whether there is to be a change to existing legislation to allow this, and whether all employers and employees in Bermuda will be able to participate in this contribution holiday. What a sorry state of affairs; politicians of all stripes agreeing to violate the law.
@ exit plan
My comments are based on what has been included in various public media and comments from various union reps.
With resepct to legislation, I expect for the Premier to make any necessary legislative changes to make the proposal legal. One recent example was when government introduced the hardship legislation whereby people could withdraw funds from their pension if they were about to lose their house for example becasue of mortgage arrears.
These are clearly difficult times and we need to make difficult decisions. If you are a retired Civil Servant and in receipt of your pension, the proposal will not have any impact on you.
I note the overall concerns about the pension plan. We must all remember that mandatory retirement pension were introduced in 2000. thus what is being recommended is reasonable under the circumstances. The need is now and and we must act now, for the overall good of Bermuda.
The next few days will be interesting as we hear various competing claims about the proposal. We will all need to be careful and listen to facts.
Vote For Me,
You still have it wrong.
The Civil Servant takes home the same as he did before. He loses nothing at all at any point, because there is NO suggestion that the final pension will be adversely impacted. He still will get a full defined benefit pension. So the 8% reduction is a total sham arrangement, designed to look like it is something that it is not.
For MP’s, your math is wrong. Their take-home is reduced by 5%, not 17,5%, but again there is NO impact on their final pension.
The problem with what they’re doing on pensions is that it is a terrible move, from a financial management perspective. The future pension liabilities still exist – it’s just that we have stopped saving for them. That’s a bit like taking a year off mortgage repayments and then hoping you can catch up by making bigger payments in the future. It’s a really stupid thing to do.
@ Rick Rock
Please reread my example above. We agree that there is no impact on the Civil Servant take home pay (it remains at 92 in my example). There is, however, a reduction to the take home pay for parliamentarians (it reduces from 87.5 to 82.5).
With respect to the benefits, you are wrong. The comparison to a mortgage is not appropriate because you incur interest on the mortgage as long as the debt is outstanding. The salary proposal is for there to be a one year holiday – no contributions and no benefit. On this basis, there is no adverse impact on the pension funds. What is clear is that the employees will get one less year of pension service when they retire. That should not be a problem becasue it will be the one year that they (nor government) made any pension contributions.
Again, please reread my example – it is accurate and based on the respective pension guidelines for government employees and parliamentarians.
Vote For Me, Where do you get the idea that the final pension benefit will be reduced for civil servants and MPs? And how exactly will they do that, on a Defined Benefit scheme? There is nothing in Cox’s letter, or any other announcement, that indicates any impact on final benefits. Is this all an assumption you’re making?
@ Mad Dawg
Speak to a union rep or someone that attended the many meetings.
The final benefit will be reduced by not counting the holiday year.
Example – If I work for 30 years, I will get a pension benefit for 29 years becasue of the ‘holiday year’. As they say, there is no free lunch. Nobody should expect to not make contributions and still get the benefit.
So we have to trust Union reps who have been to secret meetings with PLP Ministers?
Excuse me while I puke.
@ Rick Rock
Secret meetings?? The meetings were open meetings for union members.
And the rest of us, who have to actually pay the tax bills, have no idea what was said or not said. VFM, the final benefit will not be reduced by a penny. The reduction in penions contributions is just a postponement of the payment.
I don’t know why you don’t just admit it. It’s obvious you’re wrong.
The premier said that CS is getting a 8% decrease versus a 5% decrease for members of parliament. For your calculation to work and in order to use your 17.5% the premier would have had to say that the CS were getting a 16% decrease.
In the CS case she mentions the decrease plus pension equals same take home pay, ie, 8 plus 8 back but in the case of the MPS she says 5 plus 12.5 (which is pension contributions and never was part of take home anyway!) is suddenly 17.5. Why didnt she use the same terminology for both then?
She says “similar arrangement but add the pension into the calculation for MPs but not CS? Someone is being very damn disingenious…
VOTE FOR ME said
“OK – lets do the maths
Civil Servant
Current gross pay – $100
Pension deduction 8
Net pay (take home pay) 92
New gross pay with 8% decrease 92
Pension deduction 0
Net pay (take home pay) 92
Parliamentarian
Current Gross pay 100.0
Pension deduction 12.5
Net pay (take home pay) 87.5
New Gross pay with 17.5% decrease 82.5
Pension deduction 0.0
Net Pay (take home pay) 82.5″
I’m sure you noticed that you put the 12.5% contributuion in twice in your calculations. By the same math, since the premier distinctly says 8% for CS and 5% for MPS plus similar pension arrangements means that your example SHOULD be:
OK – lets do the maths
Civil Servant
Current gross pay – $100
Pension deduction 8
Net pay (take home pay) 92
New gross pay with 8% decrease 92
Pension deduction 0
Net pay (take home pay) 92
Parliamentarian
Current Gross pay 100.0
Pension deduction 12.5
Net pay (take home pay) 87.5
New Gross pay with 5% decrease 95
Pension deduction 0.0
Net Pay (take home pay) 95
Effectively a pay rise… but I’m pretty sure you knew that…
@alsys
My calculations are correct.
Civil servants – take an 8% pay cut and suspend pension contributions. As a result there is no net impact on take home pay. Civil Servatn still takes home 92% of gross pay (assuming no other deductions).
Parliamentarians – take 17.5% pay cut and suspend pension contributions. As a result, there is a net decrease in take home pay from 87.5% to 82.5% of gross pay (assuming there are no other deductions).
Parliamentarians – take 5% pay cut and suspend pension contributions. As a result, there is a net decrease in take home pay from 100% to 95% of gross pay (assuming there are no other deductions). <<< Fixed
The pension decrease was never take home by either party. Should need not be included in the actual pay cut.
Actually you are completely wrong. Using the premier’s own words, there are TWO measures which EQUAL the 17.5%, the 5% pay decrease plus 12.5% pension contribution cessation. As the 12.5% was never take home money, your calcualtions are completely and utterly wrong. IE, if you wish to say 17.5% you must use gross not net, the same way you did with the civil service! You can’t use a different calculation for the CS than you are for the MPs and call them even. That, sir, is called LYING.
The sad thing is it is more than evident now after your many replies that you are purposely confusing the issue.
Again SNAP……….. PLP Blogger’s (just them not all supporters or anything foolish like that) getting beat down. How will they spin this now that multiple people are now aggressively paying attention to this stay toon next time when bloggers respond with every excuses in the book from the good of the country (which they are only now worried about i.e. budget coming soon) to racial slurs and name calling so butter up your pop corn grab a seat and get ready to enjoy the hypocrisy that will likely ensue……..que the “special” crew
LOL
disclaimer I know my comments don’t help please see suggestion about reduce work week and the like made multible times by myself and many poster. BUT you could make this stuff up if you tried ….. pls tell me some ones taking notes this is a best selling drama FORSURE……
@ LOL Original Your post shows that you clearly do not understand what is happening, It is not the PLP blogers who are taking a beat down as all many of us posting are doing is simply explaining what is happening. If people do not feel the pay cut is sufficient that’s their opinion but the fact remains that, Ministers, MP’s and Senators have agreed to the same deal offered to the Civil servants which is, to accept a pay cut equal to the amount deducted for their pension contribution in exchange for a 1 freeze on their pension contribution. 8% Civil Servants 12.5% Ministers, Mp’s and Senators.
In addition the Ministers MP’s and Senators have agreed to an additional 5% cut in pay.
12.5% will still be taken out of Ministers, MP’s and Senators pay, just not for pension contribution. 12.5% + 5% = 17.5% total cut in overall pay. 5% total cut in take home pay.
This is the fact of the matter not opinion or spin.
Do you get it now?
The Premier did not ask MPs to take a 17.5% decrease in salary. She asked for a 5% decrease in salary. So when they no longer deduct the 12.5% for pension contribution,MPs actually take home more under the plan the Premier proposed.
Tough times for The Harbourfront coming – my little spy tells me that most lunch times and dinner times at least one Cabinet member plus entourage can be spotted chowing down over “Official” business – guess they don’t really want to be served by the newly hired Bermudian help anyway.
The reply from the OBA/UBP is “weak” at best, which suggest they have few if any strong effective politicians. This proposal works best in shining the “light” on the PLP. The OBA/UBP if smart could have reset the dial and suggested a larger pay-cut for all MPs. They could have jumped in and recommended a 20% pay-cut in salaries. No instead, they come up with simply with a “Credit-Card Freeze”, which has little if no real impact on the budget. Since the OBA/UBP MPs do not need the money in the first place, a larger cut from them would have been anticipated. In the present proposal OBA/UBP could have looked more impressive in dealing with this matter, but this is clearly not the case. It is clear that Mr.Cannioner is not capable of doing anything, he does not have the ability, and is merely a “Colt”, as Mr.Richards indicated. Mr. Richard who is often tooted as having all the “correct answers”, failed in this case to take advantage of an opportunity, to step forward.
@ spg4. Be honest – whatever the OBA said would be trashed by you. If they said we’ll donate 100% to charity you would ridicule the proposal. By the way the UBP has agreed to follow the PLP so why do you say OBA/UBP? Showing your ignorance?
lolol… Supporters got the math wrong.
I would like our honourable premier to clarify this.
I think the Unions should do the same thing Ministers/MPs are doing in principle (let the pay cut be less than pension contribution).
Stop pension contributions = 8%
Take a 5% pay cut.
When I had a friend of mine explain this proposal, it would give the CS a 3% cushion to protect them from inflation.
@ Wee Pow
reread my example above.
Civil Servants – Stop pension contributions and take equal pay cut = no change in net pay.
Parliamentarians – stop pension contributions and take extra 5% pay cut = 5% reduction in net pay.
Not sure which friend you are referring to but they seem to be gettign their math wrong – or just not getting the facts correct.
You said:
Civil Servants – Stop pension contributions and take equal pay cut = no change in net pay.
Parliamentarians – stop pension contributions and take extra 5% pay cut = 5% reduction in net pay.
where are you getting and ‘extra 5% pay cut. You are spinning.. and truth be told Im not even a OBA supporter.
I find it funny how you reworded the Civil Servants part of your little equation.
Lets state it how you stated the Minister’s ‘cut’
Civil Servants – Stop pension contributions and take extra 8% pay cut = 8% reduction in net pay.
Parliamentarians – stop pension contributions and take equal pay cut (12.5%) = no change in net pay.
Sounds a bit different when you spin it the way you want eh?
@ Wee Pow
No spin required. Let’s stick to the facts.
Civil Servants – stop current 8% pension contributions and take 8% pay cut – net impact is no change in net pay
Parliamentarians – stop current 12.5% pension contributions and take 17.5% pay cut – net impact is 5% reduction in net pay.
End result – Parliamentarians get a reduced take home pay. Public Servants get to continue earning the same take home pay. Both groups will miss one year’s credit on their final pension calculations.
Fact – the Premier has done what has been requested – lead from the front
I see. Understood
@ Vote for Me: you keep saying a 17>5% pay cut, as if it is on top of the 12.5 pension cut. It is a 5% pay cut and the Premier is DEFINITELY asking more from the public than she is asking from her parliamentarians.
Given the idea of pay cuts for parliamentarians was first suggested last February – a whole year ago by Jeanne Atherden (see Bernews link above)- you can hardly say she is leading from the front. And that’s a whole year’s revenue lost in the bargain, admittedly a drop in the bucket compared to the billion or so we are in debt, but at least we would have been able to make a couple of payments without borrowing from Peter to pay Paul, as we are doing now. Her proposal goes even further – she wants to borrow from Peter’s unborn children. That’s us, my kids and grandkids and yours. Don’t you care? or is it “my party right or wrong.” God help us all!
That should be “a 17.5% pay cut, as if it is in addition to the 12.5% pension cut. It is a 5% pay cut plus a 12.5% pension finagle which together add up to 17.5%.”
Sorry
3 people go out to lunch and their total bill was $25
They gave the waiter $10 each
The waiter took $2 for a tip and gave the patrons back $1
Therefore, 3 times $9 plus $2 equals $29
So where is the other $1?
Obviously you havent been paying attention… on top of 5 percent suggested by the premier the OBA leader is saying MP’s should take a 10 percent pay cut along with giving up their credit cards, so you don’t know what your talking about once again..
@ Vote for Me and Understanding: Your math is incorrect. It is a 5% decrease to salary, with the 12.5 % pension frozen. You should not reduce the gross salary by 17.5%. The first part of your calculation is correct, however:
Parliamentarian
Current Gross pay 100.0
Pension deduction 12.5
Net pay (take home pay) 87.5
New Gross pay with 17.5% decrease 82.5 – INCORRECT. Decrease is 5% therefore: now $95 ($100-5%)
Pension deduction 0.0
Net Pay (take home pay) 95.0.
When the pension is reinstated in future years, their take home pay will be:
New Gross Pay $95
Less pension (12.5%) $11.88
Take home $83.12
So there will only be a decrease in future years when the pensions are reinstated. In the current year, they will have an increased take home pay so those criticisms are correct. To clarify, if the plan benefits are also frozen, it has raised the retirement age by one year since you now have to work 26 years to get the same benefit as 25 years.
And……@Accountant:
Presently:
Gross $100,000
Pension (12.5%) $ 12,500
Take home $ 87,500
Proposed:
Gross $100,000
Cut 5% $ 5,000
Take home $ 95,000
That’s an increase of $7,500 p.a. or 8.57% (on current take home of $87,500).
Clear enough for all?? Let’s STOP talking about a 17.5% cut please!!
@ Argosy
Please check the details. There will be a 17.5% decrease for Parliamentarians. Thus my calculations are correct.
@ Accountant
Please check the details. There will be a 17.5% decrease for Parliamentarians. Thus my calculations are correct.
reread the statemebnt by the Premier..it states a 5% pay cut not a 17.5%
the total reduction is 17.5%.
The reduction for civil servants is 16%, using the same wording..
@ Argosy
I agree with you – that’s my point!
Everyone’s getting all serious about the details.
THE SYSTEM IS BROKE! THERE WILL NOT BE ANY PENSION TO PAY OUT.
1% 3% 125% WHO CARES, IT IS NOT GOING TO MATTER, IT IS MOOT!
The country is in more debt than it can possibly pay back under the circumstances.
These circumstances are the loss of foreign exchange in ever increasing amounts as the Government expels every hard worker in their xenophobic rage.
I am not crying “fire” in a crowded theatre, I am crying “fire” in a BURNING theatre!
By the way, a friend from The Pentagon was down the other day and complimented us all with
“At least your war on International business is going well”
So an increase in take home pay is being masqueraded as a CUT? Really!? lol… beyond insulting.
With all these different interpretations I hope the rank and file union members understand these theories.
Some of you are a bit confused.
To be fair, it is a cut, but it’s not as clear cut as is being presented. For this year, these employees will actually see an INCREASE in their cash flow. But remember that pension is effectively YOUR money, you are just putting it aside so you can’t spend it. Not paying pension contributions means you are not saving, so you have more money to spend this year. But when it comes time to retirement, a defined benefit plan is a specificed calculation based on a % of salary (usually an average of the last few years) * number of years of service. Freexzing the contributions will reduce the number of years of service by one, so now these employees will have to work an additional year to obtain the same benefit. So it is a cut, but a cut spread over the future not just the present. Both sides of the debate are correct, but the truth is it puts more money in their pockets today BUT they have to work an additional year if they want the same benefit.
An increase due to a decrease. No wonder this is so clear to all.(sarcasm)
More kicking the can down the road to pay a later day.
More confusion for the people footing the bill.
More knee jerk economic decisions.
@ Vote for Me – You need to read the article again. There are TWO measures – one is a pension freeze, the other is a salary reduction.
The Premier said the two measures will see a reduction of 17.5% in Minister and Members salaries for this upcoming fiscal year, and asked Mr Cannonier if he “would indicate whether your members would be willing to join the Government members, and agree to a decrease in your salaries and a one year freeze in pension contributions.”
If what you said was correct, it would be a 17.5% salary reduction, but it is not as the premier state. When the contributions resume, it will be based on the new salary.
@ I am not sure what you are asking me to do.
The Premier said the 2 measures will see a reduction in Ministers and Members Salaries for this upcoming fiscal year. I have used that information in my calculations.
In the absence of any other information, I expect salaries to restored to their current values next year.
I’m asking you to look at your calculation as you are treating the two separate measures as one, and they are not – only one is reducing the salary, and one is freezing a deduction which has NO impact on your salary. You treated the pension freeze as a reduction in salary in your calculation which is wrong. If you stop paying a deduction, you have more in your pocket NOW but it doesn’t change your salary.
Pension deductions are simply payments to your future self, so not paying them now means you have less LATER. I do not agree that it’s a salary increaase because pension deductions are your money – you just get them in the future. It’s exactly the same as if you decided not to save any money this year – it’s not an increase in your compensation, but you do have more money to spend. That’s not necessarily a good choice, because less savings means you’re going to have work longer before retirement.
The reason it is a cut is because the employer also contributes to your pension, so if they’re not making the contribution, you’re going to end up with less.
This conversation seriously highlights the need for better financial literacy in the community.
@ Accountant
I agree that the proposal highlights the need for increased financial literacy for the community.
I understand the point that you are trying to make but I do not agree. It would be entirely unusual if teh Premier is asking MPs to do less that the Civil Servants. Thus the Parliamentarians will take a 17.5% salary reduction. The net impact to their take home pay, will be 5% since the legal obligation for pension deductions will be removed.
Are saying that what she proposes, and what will actually happen, is that the Government will pay them 17.5% LESS. This will accrue to a 17.5% saving in the Consolidated Fund. 5% of this saving will be an actual salary cut and 12.5% will be diverting the 12.5% that previously went into their Superannuation Fund into the Consolidated Fund instead – the latter to effectively disappear forever into the bucket that we all know now has a gaping hole in the bottom. In addition, Government scores/wins again as it further saves the 12.5% that it would have to pay from the Con. Fund into the Super. Fund to match their contribution! Not what any right thinking person would describe as a “win-win” deal! One side 17.5% down, the other 30% up (5% + 12.5% twice)!
Is this what you’re saying??
If this is indeed the scenario, does everyone understand the reality or are they being “deceived”?
Appreciate the conversation! Hopefully there will be some clarification and then we can determine the exact impact and which understanding is correct; with any luck it will be yours.
Agree….
It’s so (deliberately deceptive??) loosely worded that we will have to wait for the real end-game to be forceably prised out “…into the sunshine….”!!
One side has it right. IMHO, either way, it’s a crock….
Accountant, I may be mistaken but your posts read like you think the ministers are on a DC plan (don’t pay in now, don’t get money later)… they are not, they are on a DB plan so whatever contributions they do or do not make are theoretically irrelevant since their pension will be calculated by a formula based on their average earnings and years of service. There are different ways of shaping that formula, but employee contributions is not one of the variables
Incorrect. Most defined benefit plans factor in both salary amounts AND duration of employment. You can google this and see for yourself. The deal is they get one less year of service, so it does impact their payouts.
@Accountant if you read the statement correctly you will understand the situation.
As it relates to MP’s, Senators and Ministers;
You are looking at the 12.5% as a freeze on their pension contribution only. However in addition to the freeze there will be a 12.5% deduction in gross pay.(12.5% will still be deducted just not for pension,it is a cut in pay) this will result in no change in take home pay as the 12.5% cut will be balanced out by the 12.5% freeze in pension contributions.
In addition their will be a further 5% cut in Ministers, Senators and MP’s pay resulting in a 5% decrease in their take home pay.
12.5% + 5%= 17.5% total cut in pay.
The 12.5% cut in pay with the 12.5% freeze in pension contribution is in line with the deal offered to the Civil Servants. The further 5% cut is an additional cut that Ministers, MP’s and Senators have agreed to.
The Civil servants were asked to take an 8% cut in pay with a freeze in their 8% pension contribution. With no further cut in pay their take home pay remains the same as the 8% pension contribution cancels out the 8% cut in pay.
Ministers total pay cut from Gross pay: 17.5%
Freeze on Pension Contribution: 12.5%
Total loss in net pay: 5%
Civil Servants total pay cut from Gross pay: 8%
Freeze in Pension Contribution: 8%
Total loss in net pay: 0%
Understood – reading it again I can see that interpretation. If that is the case, then yes I agree and it is a 17.5% cut.
Current scenario
Gross pay $100
Pension cont
Thanks for clarifying that the Pay Cut for MPs is 5%, not 17.5%, as shown under “Total loss in net pay” above. At least you show some honesty.
@ Bewildered I’m not sure your understanding,the total pay cut is 17.5%, its just a 5% loss in take home pay. Since the other 12.5% would normally be their pension contribution(which will be frozen) it would not be included in their take home pay anyway, therefore is not a loss in Net Pay(take home pay). It is however still being deducted therefore a pay cut.
We’ll have to disagree on that one. It is not a pay cut, except in PLP speak. By the way will the compulsory retirement age be amended so people can work longer to make up for the shortfall in their pensions thanks to the PLP not being able to fully fund it?
Makai, Let me explain further. These are Defined Benefit Plans. Simply, the benefits are paid regardless of the amount of money in the Fund. This is why they are almost non available anywhere in the world in the Private Sector. They are too expensive and companies can’t afford them. Governments can afford to continue them, at the moment, because they can fund from taxes. With the reduction in the tax base and increase in Government base, it is highly unlikely that Bermuda’s Plan can survive more than about 10 years at best. For an MP or Government worker, it makes no difference if they receive, and then pay back the contribution as they will, with the caveat above, still receive their benefits. If this was a Defined Contribution Plan, then I would agree with you, but it is still a dangerous and wrong thing to stop the contributions.
“The combination of the 2 measures above will see a reduction of 17.5% in Minister and Members salaries for this upcoming fiscal year.”
Letter from the Hon. Premier to the Hon. Opposition Leader – 9 Feb 2012.
Can’t be clearer than that!
OMG in all due respect can someone else lead the OBA. Both sides know that Mr. Craig Cannonier cannot compete with Premier Paula Cox. As a business man I have worked with this lady. I will tell you first hand she is one smart cookie. The only 2 people that are on her level are Michael Dunkley and Bob Richards. Why we put him as the leader goes way beyond stupidity.
As a OBA member I’m telling you now Craig needs to study more before he can compete with her. If we loss the election I’m going to be very upset!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
You will lose the election… no doubt about that.. it all depends how many seats you gain.
No one is questioning her intelligence. We are questioning her courage and her integrity. Craig doesn’t have to compete with her, she is doing a great job of burying herself with an abysmal financial record.
Has anyone stopped to think WHY? I mean WHY are they paid so much in the first place. Are they performing well? Is the country doing well? Does the country have a surplus of money?
Who’s in charge here? Last time I check we, the public, pay taxes which pays our MPs, thus making us thier Bosses. So to close do you think they deserve the money they make? Do we need to pay a shadow minister? Should we be hiring consultants who don’t do anying but lecture us on what we should be doing? I’ll do that for free.
Where is the leadership from the Premier? Surely it is encumbent for the Premier to put out a clear and concise explanation of what these proposals mean. Make it simple. How else can anyone agree or disagree, or provide an alternative, when there is so much confusion?
Why not show us some actual figures, not talking about percentages. How it affects the NET income figure….
I think the government mp’s should be paid like fishermen and farmers-on production.
If you can’t produce the goods you don’t get paid. Short,simple and everyone can understand
“I wish to inform you that the Government is asking Civil Servants to accept an arrangement which would, for a period of one year, involve a cessation of pension contributions together with a commensurate reduction in gross salary.
Further to this, Civil Servants are being asked to take a decrease in their salaries of 8%.
Also, as pension are not being paid, their gross will be decreased by the pension contribution of 8%.
The combination of the 2 measures above will see a reduction of 16% for Civil Servants.”
After reading this thread (a tedious exercise), all I can say is: It’s a can of worms.
Mps pay 12.5% and it is matched by government. so a toral of 25% of their sallary is paid into the fund every year.
so they will take a 12.5% gross wage reduction to be off set by them not contributing into the pension funds.
When they retire they will lose a year of service. if they worked 12 years instead of thier pension being calculaed at 12 years thier pension will be calculated at 11 years of service.
On to of this they are willing to take a nother 5% pay cut so their take home pay will be approx %5 less then what they are taking home now. un like what they are asking govt employees. Employees are only being asked to take an 8% to be off set by their pension contribution. Employess will also lose a year of service when they retire so instear of it being calculated at say 25 years it will be calculated at 24 years if they have put in 25 years of service.
Well it is about time someone made the suggestion to take a pay cut.
i understand that Paula is trying to save jobs and all but she needs to lead from the front and take the cut and all her staff and her opposition and LIKE IT. OTHERWISE the people of trhe country will vote them out and start fresh or just pack up shop and leave.
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Suggestion for Bernews/RG webmasters:
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All,
this has been a great ‘financial’ discussion today. It seem we all finally rached the point of agreement. The Parliamenatarians get a net reduction in take home pay but Public Officers are not impacted by a net pay deduction.
OBA Leader ‘takes the cake’ for all of us. He admits that the OBA initiated the idea of a pay cut but they did not think of using the pensions as an means to do so – congrats Premier Cox – I think we will all agree in time that your proposal is simply brilliant.
It is also brilliant that the pension fund is hundreds of millions UNDERFUNDED
and because the government drove us 1.3 billion dollars into debt with little hope
of keeping up with the interest much less principal, we are now finding the need
for the 1st bandaid to be applied via all that %cut nonsense. Drink the kool-aid
drink da kool aid.
@vote for me – how Cud This be brilliant ? You think a pay cut where MPs ends up getting more money is brilliant? Don’t you think that’s still looks bad? The PLP need to leaves politics alone and you better check yourself!
The Pension “holiday” is merely a continuation of failed PLP good initiatives (ignoring things such as term limits).
Free Day care for all – rolled back to being means tested
Free Bermuda College – rolled back to having to pay
Free bus and ferry – rolled back to only schoolchildren
Free car licences for all seniors – about to be rolled back due to abuse
Implemetation of compulsory Pensions – Intended to be for retirement, but now allowed to take money out, and now the Government has no funds to pay into their own Fund.
Soon it will be the turn of the Government Overemployment Program to be looked at.
People are confusing what MP’s take home pay will be with this proposal(1.5% more than before) and the COST to the Govt. to pay them – 11.25% (5% + 6.25%) less because no pension contribution will be made by either the EMPLOYER 6.25% or the EMPLOYEE 6.25%. So if an employee is does not have to pay their 6.25% Pension contribution, but receives a 5% pay cut, net salary increases approx. 1.25% and the Govt. saves 11.25% (5% + 6.25%) by not paying employer portion of Pension and reducing employee net pay by 5%. That’s how I see it…but I could be completely wrong cuz I just a country bye