Government’s proposed pension reform will in no way reduce the monies to which public servants or pensioners are now entitled.
The assurance has been given by Minister in the Ministry of Finance and Economic Affairs, Ryan Straughn, who has maintained that Government will not disadvantage workers in the public sector.
Last month Prime Minister Mia Mottley announced pension reform plans to include making the National Insurance Scheme (NIS) more independent.
One of the most controversial aspects of that reform is that new employees in the public sector will have to contribute 40 years of service to qualify for maximum pension. Currently, public servants reach their maximum pension after 33 and a third years.
Additionally, Mottley revealed plans to make the NIS a statutory corporation by the end of 2022, making it more independent from Government in its operation; to recapitalise the scheme; require the NIS to diversify its investments at home and abroad and ensure that where private projects seek public support, they give the NIS the choice to invest.
Speaking during a panel discussion entitled ‘Pension Reform: The Fiscal, Economic and Social Implications at the National Union of Public Workers (NUPW) on Wednesday night, Straughn said Government was merely looking to improve the way in which pensions were funded.
“I can say to all of you that the Government of Barbados intends to resolve this matter to the satisfaction, not of all public servants, but certainly to ensure that fiscally, we are in a position to ensure that over time, the actual amount of pensions paid directly from the revenue that you collect in any fiscal year that we will be able to reduce that.
“It does not mean that the pensions of any public officer will be reduced or any such thing. We are seeking to ensure that it is done in such a manner that over a period of time, what is coming directly from revenue every year reduces because you have been able to set up a fund that is capable of investments that allow those investments to grow such that in the same way, when we make our contributions every month to the NIS, the NIS invests those funds and when you reach your retirement age the investment income that the fund attracts is able to do that,” Straughn explained.
“So there is nothing mysterious about what the Government is proposing, particularly with respect to those public officers whose incomes are above the insurable earning ceiling. It is important for me to make it clear that what we are talking about here does not in any way diminish the value of any public officers’ pension. It is how it is financed and paid…and without any misinformation going out to the public, I want to give the existing public officers, as well as existing pensioners the absolute assurance that the Government of Barbados in no way is seeking to reduce anybody’s pension who is already a pensioner or for those public officers who are in the system already with respect to doing this. The options will be made available not just for new persons to enter the public service but to make sure that retirement planning becomes a very critical focal point for all the employees in Barbados.” (RB)
