Mid-Med Bank staff pension fund saga (1)

The saga of ex-Mid-Med Bank employees seeking justice vis-à-vis their share of the liquidated pension fund brings back sad memories of experienced and qualified bank employees who for various reasons (even political) were obliged to seek new pastures.

I fully concur with all that Anthony R. Curmi said in his letter (October 22) and would like to add that it is undeniable that this pension fund was Mid-Med Bank employees' property as it constituted deferred pay, which was in fact not administered by Mid-Med Bank but by trustees. So much so that the setting up on a non-contributory pension fund by Mid-Med Bank Ltd was intended to offset Barclay Bank Ltd's employees' reduction in their salaries and was, in effect, what clinched the deal for the smooth transfer from Barclays to Mid-Med.

The testimony by Mr Curmi, in his capacity as general manager of Barclays in Malta at the time and who was later appointed as the first general manager of Mid-Med Bank Ltd, and by myself, then president of MUBE, does not seem to have impressed the court of first instance (which found against the ex Mid-Med employees).

We had represented interests from opposite sides of the fence and, yet, finally managed to work out a solution (after tough negotiation with Lino Spiteri, then deputy Governor of the Central Bank on behalf of the government of the day, and the directors of Barclays Bank in the UK) which was eventually approved by all the parties concerned, including the Barclays Bank employees, whose jobs were in the balance.

Eventually, after long years of procrastination, the fund was wound up and Mid-Med took possession of the remaining pension fund balance of about Lm1.5 million (€3.5 million) and thereby deprived its former employees of their just entitlement.

It has to be emphasised here that these same ex bank employees were all (or practically all) still on Mid-Med's books when their union (MUBE) made a claim for the pension fund to be liquidated and distributed fairly among the bank's employees once legislation had been enacted whereby employees were entitled to only one pension. The union's first claim in this respect, made in 1979, was ignored and, as things turned out for MUBE, the union was "vindicated" some eight years down the line to the detriment of those who had since resigned. If this belated decision was by design or not is immaterial; the fact is that MUBE had lodged an undeniably legitimate claim for the fund's liquidation in 1979 and logically and equitably all staff members, on whose behalf, contributions to this pension fund were made, according to the terms of the collective agreement in force at the time, were entitled to their share from this pension fund in direct proportion to their years of pensionable service.

At the end of it all, no one can deny that Mid-Med Bank Ltd and its successor HSBC Malta plc have over the years profited immensely by Mid-Med's appropriation of the residual balance of the pension fund in question (to the tune of at least €50 million, by my estimate) and this from an asset which never appeared on Mid-Med Bank Ltd's books before it was appropriated, without any compensation, to entitled Mid-Med ex employees. This transfer of funds to Mid-Med Bank Ltd was approved by the pension fund's trustees, as can be ascertained from the public deeds that set it up which were drawn by notary Alex Sceberras Trigona, two of which were dated October 6, 1978 and another dated February 23, 1979. I contend that such a transfer was not in the best interest of the pension fund's former members and should, therefore, never have been approved by the trustees.

It irritates me when I realise that a foreign employer (Barclays) had the welfare of its staff at heart when, on the other hand, a Maltese bank had acted so selfishly. Perhaps it is now opportune for HSBC to reconsider its inherited position and opt for an altruistic spirit of goodwill, where common sense prevails, as the very questionable interpretation of the "letter of the law" by the court of first instance, may very well be ultimately overturned by a superior court decision, correctly interpreting the obvious, with all the implications and consequences that this would have for HSBC.