The Bahamasair employees’ pension fund has been embroiled in turmoil due to a dispute that has also divided the trustees responsible for its management and administration.
Judge Loren Klein, in an October 21, 2022 decision, revealed that directors representing the flag carrier itself and those acting for the Bahamas Airline Pilots Association disagree with their counterparts at the Airport, Airline and Allied Workers Union. (AAAWU) and the Public Managers Union (PMU) “on the general administration and management of the fund” which contains millions of dollars for retirees.
Gladstone Adderley, Susan Palmer and Hugh Morally, the three AAAWU trustees, have filed a lawsuit against their counterparts representing the interests of Bahamasair and pilots in the Bahamasair Employees Provident Fund for what they claim is the “inappropriate” modification of the trust deed and rules. governing the pension plan. They claim to have the support of their union colleagues from the PMU, representing the airline’s middle management.
The changes, Judge Klein noted, would have allowed directors of Bahamasair and pilots to manage the trust and exclude those from both unions. “This, it is said, had the effect of altering the quorum requirements of the committee to the detriment of plaintiffs (AAAWU trustees), and cleared the way for defendants to administer the affairs of the trust – including the power to amend the trust instruments – excluding the plaintiffs and the PMU trustee,” he wrote.
“They also allege other mismanagement, including their exclusion from management duties and meetings by failing to give notice; withhold their fees; not to share reports and other documents that requesters deem necessary for the performance of their duties; and the improper appointment of the committee chair (Dion Bethell).
The Deed of Trust sets out how the pension fund is to be administered and managed on behalf of Bahamasair employees, both existing and retired. Diving deeper into the dispute, Judge Klein added: “Significantly, the plaintiffs argue that the effect of the amendments was to oust their participation in the management of the fund, as it allowed the defendants to form a quorum and to conduct all necessary business without them, contrary to the requirements of the rules.
“They also claim that the conduct of the defendants resulted in the loss of their monthly fees from November 2021, apparently due to their failure to attend meetings – of which they say they were not informed – and even if they continue to perform other duties to the fund.
“Furthermore, they question the legality of the election of the first defendant to chair the committee. They also allege that the defendants denied PMU a second directorship, even though it was voted on and approved,” he added.
“Finally, they say that the defendants caused an audit to be prepared without their knowledge and without their approval, and present it for approval at the current annual general meeting, although it has not been seen or approved by the plaintiffs and the syndic of the PMU.
The problem with disputes of this nature is that they prove to be a major distraction for those tasked with properly administering and managing millions of dollars on behalf of current and future retirees, although nothing in the judge’s decision Klein doesn’t indicate that to happen here. The Supreme Court was not required here to rule on the merits of the AAAWU trustees’ case, only on their injunction application.
The three AAAWU trustees had sought an injunction to block the AGM, originally set for August 10, 2022, and had released the pension plan audit until the main dispute was resolved and the auditor’s work is reviewed and questioned. The scheme provides for scheme members to contribute between 5 and 6% of their salary, with matching contributions paid by Bahamasair and participating unions.
Judge Klein, in granting the injunction sought by the AAAWU trustees, limited it to restraining representatives of Bahamasair and the pilots from acting on any of the disputed amendments to the trust deed that were allegedly agreed to at the November 10, 2021 AGM. They are also prohibited from performing work on behalf of the Pension Plan without the knowledge of the three AAAWU representatives.
The audited financial statements were already posted on the pension plan’s website on August 4 this year, and Judge Klein added: “I lift the interim injunction granted on August 10, 2022 preventing the AGM from taking place. . This means that the committee, acting in accordance with the quorum requirements existing prior to the 2021 amendments, is free to give the notice required for the AGM to take place.
“To facilitate the AGM, I also direct that the applicants be provided with the necessary documents relating to the audit and the opportunity to discuss the said audit with the auditors at a meeting organized for this purpose. I further direct that they attend this meeting when it is organised.
“It should also be clear that the issue of amendments does not arise for consideration at the AGM. The trust deeds are very clear as to the location of the power to amend; it relies on the company and participating unions with the trustees, although wordings for the exercise of power differ depending on the nature of the changes proposed.