- Norman Grindley/Staff Photographer
Raymond Campbell (left), country manager of First Caribbean International Bank, shares financial information with Joy Charlton (centre), general manager of Trafalgar Travel Limited and a trustee of the Air Jamaica Pension Fund and attorney Donovan Walker, legal adviser to the fund. They were attending a press conference at the Jamaica Pegasus Hotel in St. Andrew last week.
Susan Smith, Staff Reporter
TRUSTEES OF the defunct Air Jamaica Pension Fund are appealing to the Government to allow $80 million in the fund to be paid out to beneficiaries, said Donovan Walker, legal adviser to the fund.
The appeal on humanitarian grounds is the route being taken by the trustees to speed up the 10-year legal battle between the Government and the trustees on the settlement of payments to the beneficiaries. They have written a letter to the Ministry of Finance and Planning to make their appeal.
"Putting all legal matters aside, we will make an appeal on a humanitarian basis," said Mr. Walker. "People are suffering."
He was addressing beneficiaries of the fund on Wednesday at a press conference held at the Jamaica Pegasus Hotel in St. Andrew.
The legal battle is centred on the technicality of the term "winding up," in the Income Tax Act. The Income Tax Department argues that the $80 million is taxable based on the section 44/3c of the Income Tax Act. The section states that, "Income shall be chargeable in respect of any sum paid by way of distribution of any surplus arising on a winding up of an approved superannuation fund as if such sum were income of the year in which it was so paid or repaid."
'WINDING UP'
The Income Tax Department interprets 'winding up' to mean still existing or not ending, says Mr. Walker. Thus they think this $80 million, which is in the trustees' possession, should be taxed before distribution.
The trustees, on the other hand, interpret 'winding up' to mean ended or no longer in existence. With this interpretation and based on the Tax Act in section 44/3 c, the trustees argue that the $80 million in question is no longer income because the pension fund is defunct or non-existent and the amount is not taxable. Mr. Walker informed the beneficiaries and journalists that the board of trustees has won every case with its interpretation of the tax law since the lawsuit started. It has written to the Government making an appeal to end the battle and was told by the minister of finance in a letter, that the legal channel is the only recourse. The earliest court date given to the trustees to make the appeal is November 2005. But according to Mr. Walker this time is too distant. He has been receiving letters from beneficiaries of the fund and says money is needed immediately to assist them with hurricane repairs. It is in an effort to expedite the process that he and the members of the board of trustees have made their appeal. Vilma Smith, one of the pensioners in need of the funds to help in the recovery from Hurricane Ivan is hoping that the Government will empathise with the pensioners' plight and grant an appeal. Raymond Campbell, country manager of First Caribbean International Bank and financial trustee of the fund, said that as at June 30, 2004, $l99.9 million net assets were available to beneficiaries.
By the end of September 2004, $796.8 million had been paid out to beneficiaries while some of the assets have been consumed in expenses incurred in the legal battle and in distribution of funds. Mr. Campbell says 80 per cent of the pension funds received has already been paid out to the beneficiaries and the battle is now with the remaining 20 per cent.
"We only have a maximum of J$30 million that we could pay out tomorrow," said Mr. Campbell.
BOTTOM LINE
"The bottom line is people want their money," says Carolyn Wright, a former flight attendant and pensioner. "People out there have the perception that the beneficiaries already have their money."
Mr. Walker said the distribution of funds is less costly when done all at once. "The cost of distributing a $20 million here and $10 million there is a lot. It does cost money to write the cheques, lodge the money, notify the beneficiaries, send out 3,000 letters, postage, having the auditors sign off on it," he added. To date some 300 beneficiaries have not yet registered and so cannot have access to any funds available to them."
There are more than 3,000 members covered by the fund.
