Union boss calls on Gov’t to take another look at pension reform plan

Concerned that Government-paid employees are being singled out for pension adjustments, the island’s largest public sector trade union wants the Mia Mottley administration to return to the drawing board on its proposed reforms.

General Secretary of the National Union of Public Workers (NUPW) Richard Greene said Friday that the Government’s budgetary plan requiring public officers to work for 40 years instead of the current 33-and-a-third in order to qualify for full pension, will disadvantage its members and he wants this revised.

Greene believes that the intended pension reforms announced on Monday by Prime Minister Mia Mottley in her 2022 Financial Statement and Budgetary Proposals should not only target public officers under Central Government, but every person paid out of the public purse.

While Greene declined to identify others whose pension arrangements should be reformed, an official within the NUPW pin-pointed members of the judiciary, Ministers of Government and the President as being among them.

“The NUPW’s position is that the review of public servants’ pensions should be done within the context of a complete review of all public pension arrangements currently existing. Public officers should not be singled out for the review of pensions alone,” Greene however, told Barbados TODAY.

He is particularly concerned that his members would now have to work longer in order to qualify for the maximum pension benefits, an arrangement which does not get the support of the NUPW.

“Moving from 33-and-a-third to 40 years for your maximum pension allocation, means then that public officers will have to work an additional period to qualify for that maximum pension. That would disadvantage the public officers from that angle if you extend the years,” Greene argued.

“If you work 36 years, you will get your 33-and-a-third. But now [under the proposal] if you work 36 years, you would only get on the 36 years. So to get that maximum pension, you would now have to work the full 40 years.”

The union general secretary said public officers should not have to work that long.

“I would like to see a review of the proposal,” he stressed.

But retired actuary Charles Herbert has suggested that extending the years for which a public officer may qualify for full pension, is not unreasonable.

“I don’t think it is unreasonable to make it 40 years. If most public servants join at age 25, and they can’t retire before 65, they have 40 years. Under the current scheme, if you had 40 years…you max out after 33-and-a-third. So, the person who joins at 25 and works until 65, is going to get exactly the same pension, if it accrues after 33-and-a-third years or accrues over 40 years,” Herbert pointed out.

He said the proposed reform is not going to affect anybody retiring probably before 2050 or 2060.

“Most people won’t be affected because they would have worked 40 years anyways with the retirement age being pushed back,” he noted.

According to him, it would only affect their gratuity because a pension for most people is going to come from the National Insurance Scheme and there hasn’t been any change to the NIS.

Meanwhile, president of the General Insurance Association of Barbados (GAIB) Randy Graham said it is better to undertake pension reform now, than wait until later with the NIS facing a potential crisis.

“We have all heard in the public that the NIS and other government pensions have had reviews and the suggestion that because of the way in which the demographics in Barbados have grown, there might be some pressure on the NIS and pension fund to keep the pension in the future. Nobody wants a situation where the funds are not adequate to support pensions,” Graham told Barbados TODAY.

“So if it is that we have to look at pension reform now as we did in the past, we could look at it again to be able to satisfy the fund requirement to pay the pensions in the future,” he said.

The GIAB head gave the assurance that his sector is willing to make its contribution to the pension system for the better.

“If it is that we have to look at it and there is a contribution in any form that can be made by the sector that allows for the future stability of pensions, you will get no challenges from the insurance sector to do its part to making sure the future pensions of Barbadians are protected,” Graham declared.

In her budget, the Prime Minister announced that the 40 year pension rule will relate to all new employees to the public service.
emmanueljoseph@barbadostoday.bb