Cabinet Ministers agreed on Sunday to take a 12½ percent across the board pay cut for both MPs and senators and payments to the public service superannuation fund will be suspended for a year, to reduce the economic impact of COVID-19.
Following talks with Government backbenchers and the Opposition, Premier David Burt told the media on Monday that legislation will be tabled in the House of Assembly on Friday.
While making the announcement, Mr Burt said the Government would be “leading from the front” on wage cuts.
This after the Bermuda Public Services Union (BPSU), the island’s white collar union, rejected the initial proposal put forward by government.
But the Premier denied that the plan was rejected, saying “no official response” had been received “from any public sector union”.
“What was sent to the union over the last week, following our conversation, is the only proposal from the Government of Bermuda,” he said.
He also stressed that no civil servant would be “taking home any less money” under the proposed plan.
Pay levels would be maintained by the one-year suspension of superannuation payments and a freeze on social insurance payments in the next fiscal year.
In an email to its members, the BPSU said it was “disappointed” by the Government’s latest offer.
As first reported by TNN and reported by Bermuda Real, the union’s executive committee said the wage cuts put forward were “unreasonable”.
The BPSU also stated that the pension contributions “must be maintained”, while noting that there are “other areas that can be trimmed”.
The result of the reductions proposed by the Government should save an estimated $500,000, a sum likely to increase as public sector workers join in the savings via applied reductions currently being discussed with their union representatives.
Responding to a question fielded by TNN, the Premier said: “The first thing I must recuse one more time is that under the proposal which we’ve laid out to the public sectors is that no one will be taking home any less money and as many times as persons say ‘a pay cut’ I want to make clear that no persons will be taking home any less money.
“What I can say I that following our video Cabinet yesterday and after conversations with both the Government backbench, the Opposition, we will be leading precisely from the front of which we have asked public sector workers to do.
“So we will be tabling legislation in the House of Assembly provisions to parliamentary pay and there will be 12.5% reduction with an additional suspension to the of the public service superannuation fund for Ministers, members and officers of the legislature.”
As noted in our report, the BPSU stated: “It is the position of the BPSU that there must be shared sacrifice and a rebalancing of the budget — this is even more important gives the economic crisis the country is facing, as the inequities in Bermuda have been magnified.”
The union’s executive also said the Government’s proposals were “not in keeping with their public commitment to ensuring that there is a shared sacrifice throughout the community”.
The proposal put forward by Government called for $106.8 million in employee-related cuts, with another $43.2 million in Budget cuts in other areas that range from $24 million in capital spending, $4.3 million on supplies, $4.3 million from grants to external bodies, in addition to Budget cuts on repairs, training, consultants, travel and uniforms.
Another $25 million could be saved through a hiring freeze, with an unknown amount of money saved through early retirement.
Freezing superannuation payments for a year was projected to save $28.8 million and another $9 million as a result of suspending social insurance payments.
Talks initiated by the Government were held earlier this month with both the BPSU and the Bermuda Industrial Union.