The independent member for Bamboo Town, attorney and former Attorney General Tennyson Wells alleged, during his contribution in the House of Assembly, that “an inordinate portion of BTC’s pension fund may be committed for the purchase of City Markets”.
His fellow independent member for St. Margaret’s Pierre Dupuch , showing his support for Bahamian pensioners said, “We apparently do not have controls or regulations in place to control some bandits that seem to be out on the road.” Continuing to express his concern, Mr Dupuch at least admitting his “personal issues with them [Colina]” proceeded to “warn the government” of its obligation “to protect the workers of these pension funds that are out there.”
Warming to his task of warning the government, Mr Dupuch reminded the government that “thousands and thousands of people are expecting to collect sometime down the road”. He called on the government to meet its obligation and “make moves today to stop what I understand is going on”. Seemingly like his colleague he too had done no testing of the reports for he continues in, full flight that if the reports are “true, it is dangerous.”
“It is serious and you must as a government take a stand now, not tomorrow, not the next day, but now to stop it.” Notably neither Mr Dupuch nor Mr Wells made any suggestions on how those “thousands and thousands of people” could be protected.
But to understand what Mr Dupuch was warning the government against, was laid out by Mr Wells.
Mr Wells stated that he had received reports that Colina Financial Advisors Limited (CFAL) which manages Bahamas Telecommunications Company’s (BTC) pension fund, plans to allow the use of that fund for the purchase of City Markets. The allegations, serious in the extreme, undermine the integrity of the financial services market, a position taken by CFAL in press statement. In response to “Mr Wells, as a representative of the Bahamian people, ought not, without cause or justification, make wild allegations and attack the credibility of financial institutions and the credibility of the financial industry,” the release stated.
Presumably Mr Wells dismissed a basic tenet of his profession – get the facts and test the evidence.
While he was Attorney General, despite his new found concern for companies who might be breaching pension rules, Mr Wells was unable to inform the thousands of Bahamian pensioners about the rules he had put in place for their protection from companies. All he could muster was the appalling “whatever those rules are”.
Purporting to defend the Bahamian pension funds from abuse, Mr Wells ought to have been able to say a bit more than whatever those rules are” and certainly more than his colleague’s “if they are true”.
If instead of accusing CFAL of possibly breaching pension rules Mr Wells had instead checked he would have discovered that CFAL has established the following procedures for managing and protecting Bahamian pension funds.
CFAL separates its assets from those of the pension funds it manages. In other words they do not co-mingle the assets of their customers with CFAL’s assets.
“When you see our financial statement it is our statement and a CFAL financial statement does not include any assets from the funds we manage,” Sean Longley explained. Mr Longley manages pension funds for CFAL. “And the reason for this is that if the company managing the fund has any difficulty or goes under, the client’s pension funds are not affected and are left intact,” he added. “This is why we do not co-mingle our assets with those of our clients.”
Secondly, CFAL requires that the client appoints a trustee to administer the fund, before CFAL can manage the fund. The trustees currently administering funds managed by CFAL are Ansbacher Bahamas Limited, Bank of The Bahamas Trust, Butterfield Bank and CIBC Trust. Ansbacher Bahamas Limited is the Trustees for the BTC’s pension fund.
Mr Longley explained that the agreement stipulates that the client appoint a trustee and also stipulates the areas in which the funds can be invested.
“Although we could invest the funds as we see fit, the agreement stipulates the areas in which we can invest those funds,” Mr Longley explained.
“The third step we have taken is to have regular meetings with the trustee and we meet at least once a quarter to go over the fund and the investment decisions we have made,” Mr Longley said.
Finally, there is a reporting requirement which CFAL fulfils by issuing a monthly statement to both the Trustees and the client. “The trust deed we sign that grants us the right to manage the funds gives us the discretion to invest in securities but our quarterly meeting with the Trustee and the monthly statement to both the Trustee and the Client ensure that there are no abuses,” Mr Longley explained.
Mr Longley said that M Wells’ comments were “completely ridiculous” Even Mr Wells and Mr. Dupuch will admit that Ansbacher Bahamas Limited, Bank of The Bahamas Trust, Butterfield Bank, CIBC Trust are reputable international institutions which take their fiduciary responsibilities to their clients extremely seriously.
As CFAL observed in its statement: “He did not se fit then to introduce such legislation and obviously he still does not see fit now to take positive steps to advocate this type of legislation.”
By C.E. HUGGINS Business Editor
