Gov’t advisor: Focus now on pandemic, not pensions

A senior advisor to the Mia Mottley administration is refuting claims that the International Monetary Fund (IMF) intends to reform Barbados’ public sector pension scheme.

In fact, Economic Advisor Dr. Kevin Greenidge has dismissed growing concerns as “much ado about nothing”, contending Government’s front-burner issues all surround the COVID -19 pandemic.

He was responding to increasing anxiety among public workers following the IMF’s latest review that followed a virtual staff visit. Contained in the report are intended revisions to the country’s public service pension law to occur no later than June 2021 based on the findings of a recent independent actuarial report. According to the IMF document, once the findings are reviewed, a pension reform white paper will be brought to Cabinet for discussions on the long-term sustainability of the public service pension scheme.

The developments are causing rumblings within the country’s largest public sector trade union, whose acting General Secretary Wayne Waldrond sought to allay the fears of members as he spoke on radio today.

According to Walrond, numerous pension reform proposals have been “bandied about” that include increasing the early retirement age from 60 to 62. The union leader explained that some of the proposals have been considered reasonable, while others have been vehemently rejected. He, however, stressed that existing public servants will not be affected by any of these adjustments.

Setting the record straight on Friday, Dr. Greenidge rejected outright, suggestions that the proposed reforms were IMF conditionalities. Instead, the advisor explained the paper was merely reporting on planned reforms and argued last year’s actuarial review is a bi-annual occurrence.

“Let me start from the beginning and set the record straight. The IMF has not, did not and will not recommend any sort of pension reform for Barbados. None of its reports recommend any kind of pension reforms for Barbados. What the IMF report did was to report on what we are doing,” Dr. Greenidge explained.

“Every two years we do an actuarial review. That is nothing new. We did that actuarial review and that has not even been discussed. But coming out of the actuarial review, the Government will prepare a white paper to discuss possible recommendations and the way forward.

“So I can’t tell you that there will be an increase in the pensionable age or anything like that because I haven’t seen the recommendations coming out of the actuarial review report…No one knows and I think some people are trying to cause fear and confusion…In my view, it’s much ado about nothing,” he contended.

Government’s advisory team, he added, has been much more focused on economic national stability amid repeated shocks brought on by the pandemic.

“The [IMF] report says the government will prepare a white paper in Cabinet. That really is supposed to take place over the next few months, but given where we are with COVID, I don’t know if that is feasible because there are limited resources to deal with all the things that we have to deal with…COVID is the main concern right now – responding to COVID and taking care of people,” said Dr Greenidge.

“The IMF has not told Barbados what to do and as I keep telling people, this is the Barbados Economic and Recovery and Transformation Programme (BERT). Barbadians set the programme, not the IMF,” stressed the economist.

Meanwhile, the NUPW’s Walrond said he has been “bombarded with numerous calls” from nervous members demanding to know the status of their pension benefits in the wake of the recent IMF document.

Walrond, however, noted that any adjustments to the existing arrangement would only affect new entrants to the public sector. Nevertheless, he admitted some previously-mentioned proposals would not receive the blessing of the union. These include moving the number of pensionable years of service from 33 1/3 to 40 years, reducing the annual rate of accrual from 2 per cent to 1.67 per cent.

Conversely, Walrond admitted discussions on extending the age of early retirement from 60 to 62 would be more favourable to the union.

“Obviously public officers hearing about the IMF and looking towards the public sector pension, it creates some unease about the impact, if their benefits are going to be reduced and what is the future for pensions,” he told listeners on Starcom Network’s Down-to-Brass-Tacks programme.

“The NUPW is seeking to preserve the pension. Pension has been treated over the years as deferred earnings and as a part of your salary. There was a concept that a retired public officer should live with a level of social security in terms of their standard of living and to erode this would mean that pensioners would not enjoy the same income traditionally and that safety net would then be eroded,” he added. (kareemsmith@barbadostoday.bb)