Cruise Law News has received inquiries from several Carnival Cruise Lines crew members complaining that the cruise line recently terminated the retirement benefits for crew members.
Like many other cruise lines, Carnival Cruise Lines previously offered a small retirement benefit which crew members were eligible to receive for working a number of years of uninterrupted service to the company. Although the benefits were small, many crew members we spoke to considered the benefits to be an important reason why they worked long hours under difficult circumstances away from their loved ones. Some viewed the benefits as a means to make payments toward a house when they retire.
However, the crew members recently received a short memo from the cruise line telling them that their retirement benefits were suspended. Many of the crew members who contacted us felt betrayed that Carnival had promised them retirement benefits which they relied upon to continue working with the cruise line.
It is well known that Carnival Cruise Lines is under severe financial constraints following the Triumph "Poop Cruise" fiasco including other other engine room fires (such as the Splendor) and propulsion failures. And cruise fares are historically low following the public relations fall-out.
The question remains whether the termination of benefits applies to all crew members at Carnival Cruise Lines of all nationalities. As best as we can tell, it does not apply to the other Carnival Corporation brands, such as HAL, Princess Cruises, or other companies.
We reached out to Carnival Cruise line for an explanation regarding the end of the retirement benefit program. Here were some of our questions:
Does this apply to all Carnival Cruise Line crew/staff/officer positions?
Does this apply to all nationalities?
How many crew members are affected? What is the anticipated savings to the company?
How does the termination of benefits work? For example, if a Carnival ship employee worked 14 & ½ years, he or she will not be entitled to the 15-year retirement benefits upon reaching 15 years of service. Is this correct? Will that employee be entitled to the retirement benefits associated with 10 years because he or she have already worked over 10 years?
Below is the response from the cruise line late this afternoon.
The Maritime Labour Convention, 2006 (MLC 2006), which came into effect on August 20, 2013, embodies up-to-date standards of international maritime labor laws and recommendations. As of August 20, 2013, MLC 2006 was ratified by 50 countries representing 75% of global shipping. The enactment of MLC 2006 resulted in several changes to our benefits and compensation plans for shipboard employees. One such example is that we will begin paying contributions to government mandated social security programs for applicable seafarers instead of providing a company-run retirement plan. As a result of MLC 2006, Carnival Cruise Lines’ total financial investment in benefits and compensation for shipboard employees has increased significantly.
Carnival does not explain which crew member nationalities are subject to "government mandated social programs." If the crew member is not part of such a governmental program, then it appears that the crew member is left without a retirement benefit of any type from this point forward.
Also the question arises whether the crew members themselves will have the amounts paid to the governmental programs deducted from their pay.
Is the ending of the retirement benefits program really tied to the MLC as Carnival claims? Or is this an excuse and diversion to the fact that Carnival is simply slashing benefits of its ship employees to add to the company’s profitability?
If you are a crew member with Carnival Cruise Line and just had your retirements benefits terminated, please tell us what you think about the situation. Please leave a comment below.
Do you have to make payments for the social programs of your home countries? Do you know what, if anything, the government social programs provide to you for retirements benefits?
Please feel free to leave an anonymous comment or join the discussion on our Facebook page.
October 24 2013 Update: Here’s what Carnival’s website says about "The Fun Ship Retirement Plan:"
"To acknowledge and reward Team Carnival’s significant contributions to The Company’s success, and to help team members plan and save for retirement, Carnival has developed ‘The Fun Ship Retirement Plan.’
This plan provides a lump-sum benefit upon team members’ retirement from Carnival, provided they have at least 10 years of continuous service.
A prorated lump-sum benefit will be paid based on the individual’s position within the company. The amount of the lump sum payment will be based on the last position held for the previous five years prior to the retirement date.
The longer a team member is employed beyond the initial 10-year period, the faster the benefits increase. Simply put, the longer you stay with Carnival, the larger your benefit payment will be upon your retirement."